Functional Costing Deeproot Analysis

See discussions, stats, and author profiles for this publication at: https://www.researchgate.
net/publication/223091573
Management accounting and value creation: The proﬁt and loss of

reiﬁcation
Article in Critical Perspectives on Accounting · May 2005

DOI: 10.1016/j.cpa.2003.03.001
CITATIONS READS
84 4,097
1 author:
Annick Bourguignon
ESSEC - Ecole Supérieur des Sciences Economiques et Commerciales
39 PUBLICATIONS 690 CITATIONS
SEE PROFILE
All content following this page was uploaded by Annick Bourguignon on 03 May 2018.
The user has requested enhancement of the downloaded file.

Critical Perspectives on Accounting 16 (2005) 353–389
Management accounting and value creation:

the profit and loss of reification
Annick Bourguignon∗
ESSEC Business School, BP 105, 95021 Cergy-Pontoise Cedex, France
Received 17 March 2000; received in revised form 19 September 2000, 25 June 2002; accepted 1 March 2003
Abstract
Management accounting has recently broadened its scope to encompass contributing to the so-called
value creation process. Value creation is usually presented as a simple, strategically relevant and
all-embracing concept. Drawing from the Marxist concept of reification, this article shows that value
creation is commonly reified through its objectification, which prevents any dispute and further main-
tains social domination. The contribution of this analysis to more general research questions, such as
managerial innovation and the governmental role of accounting, is discussed. Academic and practical
implications are suggested in the conclusion.
© 2003 Elsevier Ltd. All rights reserved.
Keywords: Value creation; Reification; Shareholder value; Customer value; Objectification; Rhetoric; Social
domination
1. Introduction
1.1. Background
For more than a decade, the term ‘value creation’ has been used with increasing frequency
in connection with, and on the subject of, management accounting, with the usual claim
that management accounting should actively contribute to value creation (VC). Defined
as “the mathematical science of values” (Office, 1887, quoted by McMillan, 1998, p. 1),
accounting deals primarily with the question of value (Tinker et al., 1982). However, the
‘value’ which is referred to in VC is not the usual accounting ‘value’.1 VC is not first and
∗ Tel.: +33-1-34-43-30-12; fax: +33-1-34-43-28-11.
E-mail address: bourguignon@essec.fr (A. Bourguignon).
1 It would be of interest to articulate value creation with the general concept of value in accounting. But that is
another paper.
1045-2354/$ – see front matter © 2003 Elsevier Ltd. All rights reserved.
doi:10.1016/j.cpa.2003.03.001
354 A. Bourguignon / Critical Perspectives on Accounting 16 (2005) 353–389
foremost an accounting, but a strategic concept. Management accounting contributes to its

implementation—as it serves any other strategic objective.
However, although they use the same word (value creation), not all VC discourses refer
to the same ‘value’: some of them use a customer value perspective and others a share-
holder value standpoint. As firms have various stakeholders, this duality should not deserve
any comment. However, one should expect a mutual acknowledgement and discussion of
both values. . . which has not always been the case. As we shall see below, both types
of value emerged and were promoted at about the same time (in the mid-1980s) by dif-
ferent authors, and both of them have had a significant diffusion. One would then expect
that texts at least quote the existence of the other type of value—if only to unambigu-
ously be clear about their focus. However, for years, the authors writing about shareholder
value have hardly mentioned the existence of customer value2 —and vice versa. It is only
since the mid-1990s that the existence of both values has been explicitly recognised in
literature. Generally, it is argued that both value-based approaches converge and that there
is no conflict between customer and shareholder values, indeed even other stakeholders’
values.
The writings of Kaplan and Norton provide us with an illustration of the way in which
the literature has evolved. Their first presentation of the balanced scorecard (BSC) (1992)
mainly emphasises customer value, which is the starting point of the presentation and further
justifies the internal perspective, hardly mentions shareholder value and gives very quick
and general arguments for the articulation of both values:
More companies today have a corporate mission that focuses on the customer. (. . . )
The balanced scorecard demands that managers translate their general mission statement
on customer service into specific measures that reflect the factors that really matter to
customers. (. . . ) Customer-based measures are important, but they must be translated
into measures of what the company must do internally to meet its customers’ expec-
tations. (. . . ) A company’s ability to innovate, improve, and learn is directly linked to
the company’s value. That is, only through the ability to launch new products, create
more value for customers, and continually improve operating efficiency can a company
penetrate new markets and increase revenues and margins—in short, grow and thereby
increase shareholder value. (Kaplan and Norton, 1992, pp. 73–76)
In their 1996 book, the importance given to both values appears more balanced and their
integration improved. The presentation begins with the financial perspective and the internal
processes are said to “enable the business to:
• deliver the value propositions that will attract and retain customers in targeted market
segments, and
• satisfy shareholder expectations of excellent financial returns” (Kaplan and Norton, 1996,
p. 26).
2 Rappaport tried to “link competitive and shareholder value analysis” (Rappaport, 1986, p. 79) and therefore
mentioned the competitive strategy framework developed by Porter and the value chain concept. However his
analysis focuses on the industry and business unit levels. In his book, ‘value creation’ always refers to shareholder
value. His work has been consistently associated exclusively with shareholder value.
A. Bourguignon / Critical Perspectives on Accounting 16 (2005) 353–389 355
Lastly, Kaplan and Norton have explicitly claimed and argued that BSC is “highly
compatible” with activity-based costing (ABC) and shareholder value management and
that “organisations will get the greatest benefit from integrating all three” (Kaplan and
Norton, 2001b, p. 156). Insofar as ABC is one of the most popular means of implementing
customer value in organisations, this claim for integration may be regarded as a further step
towards the affirmation of the convergence of customer and shareholder values. However,
as will be documented below, this convergence is highly disputable and has received little
empirical validation.
This illustrated overview of management accounting literature over the past 15 years
raises several questions. Why have customer value promoters so long ignored the side-concept
of shareholder value (and reciprocally), whereas the word ‘value’, central to both concepts,
was fairly new in strategic semantics—a point which should have drawn the authors’ atten-
tion? How can focalisation on customer and shareholder values and the relative disregard
of other stakeholders’ value be explained, as well as the almost general consensus about
the convergence of values and the disregard of voices disputing it?
1.2. Argument and relevance
This paper tries to answer these questions and explain the various forms of myopia. I
argue here that the concept of value creation is generally reified and that this reification
sustains rhetorical processes, which are profitable to a few social actors but detrimental to
many others. I suggest that the lack of critical discussion about VC that can be observed
in most management accounting literature accounts for the reification of VC, and that the
related authors consistently draw some benefits from this reification. Nevertheless, the net
global effect of reification is broadly negative for individuals, firms and society. Finally,
there is a gap between what value creation claims to be—a simple, strategically relevant,
thus “healthy” and enthusiastic concept—and what it appears to be—an ideological concept
maintaining social order and positions, at significant social cost.
Such critical analysis is all the more relevant as value-based management methods have
been significantly implemented throughout the world,3 and thus the potential detrimental
effects of value-based management increase with its diffusion. It is then of interest to develop
a double-entry perspective on VC, i.e. to count not only its profits (as has been abundantly
done by its promoters), but also its losses (a question which has rarely been addressed).
Such a complement would open up new research perspectives about value creation.
Indeed, as far as I know, there are no empirical studies investigating the potential detri-
mental effects of value-based management. Surveys usually examine the extent to which
valued-based management is implemented and whether it produces the expected effects,4 as
attractively described by VC promoters. An explanation for this exclusive empirical focus on
positive consequences of value-based management might be that its adverse consequences
have not been sufficiently documented.
3 For recent surveys, see Francis and Minchington (2000), Malmi and Ikäheimo (2000) or Gehrke and Horváth
(2002).
4 As an example, Mottis and Ponssard report that value-based management is limited at profit centre level and
that it “follows as much the objective of introducing a cultural change than of a narrowly defined incentive purpose”
(Mottis and Ponssard, 2001, p. 44).
Furthermore, the central process of this analysis—reification—is likely to be applied to

other management concepts. The present analysis could then be useful for studying other
management methods.
1.3. Method and structure
This article investigates the process by which value creation is reified. Therefore, draw-
ing from the Marxist concept of reification, I firstly review the process of reification as
a shift from subjectivity to objectivity, which enables masking the real world in order
to maintain it. This theoretical framework is tested against the concept of value and fur-
ther applied to the concept of value creation in management accounting. The applica-
tion is based on empirical material drawn from various normative texts, mainly in the
field of management accounting and control. This literature sometimes overlaps with gen-
eral management literature, because VC is a strategic concept, and as such its account-
ing implications are often closely related to methods such as rewards or decision
making.
I define a normative management text as a text containing some propositions for ac-
tion. While normative literature unambiguously includes management books and articles
for managers, the borderline between normative and non-normative literature is not always
clear-cut. As long as textbooks describe practices and their founding concepts, they are not
normative, but very often they also recommend some of them—then they become norma-
tive. The same is true for many books or articles which rely on some research elements to
suggest “best practices”. According to their degree of normativity (which can be observed
through the language used), all these mixed-typed texts are likely to provide some empirical
elements for the demonstration.
Because my focus is about (the lack of) exchange and discussion between different
mainstreams regarding VC, the scope of this analysis encompasses all approaches of value
creation (shareholder, customer or other stakeholders). The empirical material is consis-
tently sourced in texts dealing with any management accounting method related to VC.
Shareholder value indicators and BSC are obvious here, but ABC and intellectual capi-
tal (IC) are relevant too, as will be documented below. I am fully aware that this diver-
sity may result in the perception of a fragmented, and thus incomplete, argumentation.
However, focusing on a unique method would not provide an extensive view of the var-
ious sub-processes involved in the reification process. In particular the inconsistencies,
lacking points and denials which actively contribute to reifying value creation can only
be unveiled by the confrontation of discourses emanating from various standpoints about
VC.
The article is structured as follows. The second section presents the concept of reification
and suggests a grid of analysis of the reification process. Drawing from the polysemy of the
word value, this section also shows that in general, ‘value’ hardly escapes reification. With
the help of the formerly proposed grid, the third section examines the central question of
the reification of value creation and explains how VC is reified and how this reification has
various profits and losses. The conclusion discusses the contribution of this analysis to more
general questions, namely managerial innovation and the governmental role of accounting,
and opens up some research and practical perspectives.
2. The reification of value
This section presents and tests the theoretical framework that will be applied later to value
creation. Value is the tested ‘object’. Indeed, there are no concepts without language and
words to name them. ‘Value creation’ includes ‘value’ and I assume that VC will be all the
more easily reified since it uses a semantic that refers to an easily reified concept (value).
It is thus of interest to examine the potential of reification of ‘value’—which, additionally,
provides us with a test of the theoretical framework. The section is structured as follows. I
present the concept of reification first. Then, I review the various general meanings of the
word ‘value’. This inventory is necessary to show, in a third part, how ‘value’ can hardly
escape reification.
2.1. The concept of reification
The concept of reification was developed by Lukács (1959) from Marx’s notion of com-
modity fetishism. According to Marx, modern capitalist societies are dominated by the
structure of commodity, which he describes as follows:
The mysterious character of the commodity form consists [. . . ] simply in its reflecting
towards human beings the image of the social characters of their own work, in presenting
them as objective characters of the very result of their work, as natural social proper-
ties that these things would naturally possess: it thus reflects towards [human beings]
the image of the social relationship of producers to global work, as an external social
relationship, a relation between objects. Through this interpretation, the work products
become commodities, sensitive things [become] suprasensitive, social things. (Marx,
1993, pp. 82–83)
Thus commodity fetishism means an abstraction of human work which is objectified
into goods. Lukács has reformulated Marx’s concept in more general terms and defined the
social process of reification as follows:
Its basis is that a relation between persons takes on the character of a thing and thus
acquires an “illusory objectivity” [original emphasis], which has a proper, rigorous, thor-
oughly closed and apparently rational system of laws, so as to conceal every trace of its
fundamental nature: the relation between people. (Lukács, 1959, p. 110)
This transformation of genuine social relations between human beings into relations
between things has various consequences. Firstly, the commodity resulting from the objec-
tified human activity “becomes subject to the objectivity of natural social laws, although
objectivity is unknown to persons” (Lukács, 1959, p. 114). Thus, Lukács explains, the ratio-
nalisation of work increasingly eliminates the qualitative human and individual properties
of the worker, both in fragmenting the working process and in reducing the worker to an
objectively calculable amount of working time. Consequently, both the object (the com-
modity) and the subject (the worker) of the production are broken up. The unity of the
commodity does not rise from the working process, as was the case before, but from the
mere calculation of rationalised partial systems. As for the person, (s)he is “incorporated as
a mechanised part into a mechanical system which stands completed before him/her, which
works thoroughly independently from him/her and the laws to which (s)he has to submit”
(Lukács, 1959, p. 117).
The reification process also leads to the enhancement of a reified conscience and approach
to reality. Lukács argues that “as the capitalist system continuously produces and reproduces
itself at a higher economic level, the reification structure penetrates deeper and deeper,
inevitably and intrinsically, into human consciousness” (Lukács, 1959, p. 122). The reified
world appears as the only conceivable world (Lukács, 1959, p. 140).
Reification is an ideological concept in the Marxist sense of the term. In the Marxist
tradition, ideology is “a false consciousness, a distorted representation of a reality that
tends to mask the working-class’s actual bargaining position, and the oppression to which
this class is subject” (Chiapello, 2003, p. 156). Indeed, reification hides the true nature
of human relations, which is revealed more in the original relationships (between per-
sons) than in the reified relationships (between things) (Lukács, 1959, p. 118). Moreover,
although reification means alienation of oneself for both the dominating and the dom-
inated classes, its alienating effects are detrimental only to the latter. Indeed, whereas
alienation is the very power of the dominant class, then the confirmation of its domina-
tion, alienation means helplessness and inhuman existence for dominated people (Lukács,
1959, p. 188). Thus the objectification of the working force (both through its transforma-
tion into a commodity and through the fragmentation and mechanisation of work) turns
daily reality into an “insurmountable” one, in which “personality becomes the helpless
spectator of all that happens to its own existence” (Lukács, 1959, p. 118). While in-
dividuals accept the laws of reification with fatalism, they experience a “split of [their]
self between what is and what should be” (Lukács, 1959, p. 239). Lukács concludes that
there is no individual “contemplative and cognitive” way of breaking with the process
of reification, and that only a pragmatic class consciousness can “in practice eradicate,
in the capitalist society, the “reality” of this illusion” [original emphasis] (Lukács, 1959,
pp. 252–253).
To make this concept operative and apply it in further stages to value and value creation,
I propose to draw four basic elements from Lukács’ concept. Reification is thus a process
including: (1) a shift from subjectivity to objectivity, (2) resulting in the masking of the real
subjective world and, further, its potential conflicts, (3) which prevents social dispute, (4)
which finally aims at maintaining social order.
1. Reification is a process of replacement. It is about a shift from the world of human

beings to the world of things, from the subjective to the objective, from the living to the
inanimate. In epistemological words, it is a shift from the constructivist to the positivist
position. According to the former, there is no reality outside our internal thus subjective
representations, while according to the latter, the world is external and objective (Le
Moigne, 1995, p. 19).
2. A main consequence of this shift is the masking of reality. Reality is always subjec-
tive. Indeed, basically there is no objective reality and no un-enacted world. More-
over, in a social world, different subjectivities may conflict, so subjective reality al-
ways includes potential conflict. Substituting objectivity for subjectivity means chang-
ing the façade of things and hiding both their true subjective nature and their potential
conflicts.
Table 1
The mask of reification
The real word The reified world
Subjectivity Objectivity
Conflict of interests Convergence of interests
High level of potential dispute Absence of dispute
Maintenance of social order
3. Masking subjectivity aims at preventing dispute, because dispute occurs all the more eas-
ily as divergent standpoints are evidenced. There is no point in disputing in an objective
world, which is thus made irrefutable.
4. Any social order serves the interests of some participants at the expense of others. In
a given social order, objectivity then is both the façade of domination (because the
pseudo-objectivity is nothing more than the dominant subjectivity) and its reproduction
device (objectivity prevents contesting, and thus maintains social order).
Table 1 shows a representation of how reification masks reality. In the following sections,
I use this four-point grid to analyse how the concept of reification might be applied firstly
to ‘value’ under its most general meanings, and secondly to the specific usage of the word
in the management field: value creation.
2.2. The polysemy of value
Before examining whether and how value is reified, it is necessary to inventory its general
meanings. Value is a very polysemous word and it is commonly used in various fields, among
them economy and philosophy. Additionally, ‘value’ is variously integrated in sentences
where the main verb is either ‘have’ (to have value or a value) or ‘be’ (to be a value). I refer
to both these uses as the ‘have mode’ and the ‘be mode’.
‘Value’ contains a multitude of meanings, which can be subdivided into three large
families: (1) measurement value, (2) economic value and (3) philosophical value.
2.2.1. Measurement value

Value is an equivalent for measure, especially in the mathematical and physical fields.
It refers also to the conventional measurement of an element in a hierarchically structured
series (for instance, the value of a playing card). The specific meanings of ‘value’ in painting
and music can also be associated with the measurement-related sense of ‘value’.
This first family of meanings refers to the concept of measurement, itself defined as a
necessarily approximate quantification of “reality”. In French, ‘valeur’, the equivalent for
value, is systematically associated with measure, and the definitions of value and measure-
ment are always circular. Value is defined by measurement, and measurement by value.5
The English language preferably relates ‘measure’ to ‘amount’ or ‘quantity’.6 This suggests
5 See, for instance, Dictionnaire (1988, p. 900).

6 See, for instance, the Collins Cobuild English Language Dictionary (London: Collins, 1987) or the Shorter
Oxford English Dictionary (Oxford: Clarendon Press, 1973).
that this first meaning of value may be differently emphasised according to the language
used.
2.2.2. Economic value

This second family of meanings refers to the well-known acceptations of the word in
economics. Conventionally a distinction is made between exchange value, which refers to
the relation between supply and demand, and usage value, which refers to the social utility
of a commodity. The exchange value of an item of merchandise states the quantity of other
goods that a particular social group at a particular moment is willing to exchange against
the item in question. Usage value on the other hand represents a subjective estimate of the
satisfaction procured by the item (Brémond and Geledan, 1981, p. 373).
2.2.3. Philosophical value

The concept of value has been transposed from the economic to the philosophical sphere
(Lalande, 1992, p. 1183). Philosophical value may be defined as “a break in the indifference
consisting of placing all things on the same level and considering all actions as equally
attractive” (Lavelle, 1991, p. 186) or “everything being an object, either of support or
refusal, or of a critical judgement” (Montefiore, 1973, p. 584). Conventionally, a distinction
is made between subjective and objective values.
2.2.3.1. Subjective value. Subjective value is the “character of things consisting in the
fact that they are esteemed or desired to a greater or lesser degree by a subject or, more
commonly, by a group of given subjects” (Lalande, 1992, p. 1183). In the be mode, value
is what is esteemed or desired by the subject. Beauty, good, truth, justice, nobility, etc. are
thus examples of value.
The value judgement, that is a judgement about the value (in the have mode), is always
related to reference values (in the be mode). Usually opposed to factual observations, a
value judgement concerns “what is good or bad” (Montefiore, 1973, p. 584). In the world
of values, which is strictly personal, “it is no more a question of knowing, but of feeling,
appreciating and willing (. . . )” [original emphasis] (Lavelle, 1991, p. 189). Some philoso-
phers develop an extreme point of view on subjective value according to which “all our
values are illusory” insofar as speaking of value is not describing an object but our relation
to it (Comte-Sponville, 1994, pp. 13–14).
2.2.3.2. Objective value. Objective value can be intrinsic (or immediate) or instrumen-
tal (or derived) (Lalande, 1992, p. 1183). Intrinsic objective value is the “character of
objects, consisting in the fact that they deserve a greater or lesser degree of esteem”
(Lalande, 1992, p. 1183), the “intrinsic quality of an object which, possessing the ideal
characteristics of its type, is objectively worthy of esteem” (Dictionnaire, 1988, p. 900).
The intrinsic objective value can be regarded as an extension of the economic usage
value, based on social utility. Thus the ‘value’ of a work of art, with the general mean-
ing of importance, can be assessed on the basis of a number of aspects (aesthetic, his-
torical, economic, iconographic, etc.). On this subject, it is noteworthy that, in the late
17th century, the utility value of a commodity was named ‘intrinsic’ (Tinker et al., 1982,
p. 177).
Instrumental objective value is the “character of objects consisting in the fact that they
satisfy a certain purpose” (Lalande, 1992, p. 1183). Sometimes synonymous with effec-
tiveness or validity, instrumental objective value is an “objective quality corresponding to
a desired effect or a given aim” (Dictionnaire, 1988, p. 901).
2.3. Value: an inherently reified concept
‘Value’ is polysemous, and, as is the case with all polysemous words, the clue to its
meaning is given by the context. However, philosophers generally mention that the border-
line between subjective and objective value is not clear-cut and that both meanings are not
always easily distinguishable. ‘Value’, they claim, links the individual to the universal, and
further, subjectivity and objectivity:
Value, which invariably appears to have its origin in the individual, always outstrips
the individual, (. . . ) [appearing] precisely at the moment when this change starts to
occur, namely when the individual who, up till then, was the judge of value, now accepts
judgement by value, based on a criterion applied to all other beings as well as to his- or
herself. (Lavelle, 1991, p. 221)
Thus it appears very difficult to disentangle subjective and objective values. Moreover
some philosophers argue that the use of the word value could be intentional, then aiming at
presenting subjective value under objective appearances:
[This use demonstrates] an effort to grasp and declare as fact an “external quality” of
things, which is objective, substantially constant within the limits of observation and
scientifically measurable, and which nevertheless has its “raison d’être” in an inclina-
tion of subjects and an appreciative judgement [original emphases]. (Lalande, 1992,
pp. 1184–1185)
Thus, an important point in the use of the word ‘value’ would be its potential of objecti-
fication of subjective preferences. If we refer to the proposed four-point grid of reification,
we can consider this fundamental ambiguity of ‘value’ as an effect of reification:
1. The above quotations explicitly mention a shift from subjectivity to objectivity, from
internal human judgements to external facts. Value originates in the individual but goes
far above and beyond him/her.
2. As a result, the subjectivity of value lies under a mask of universal objectivity. Objectivity
acts as a mask, because the supposedly “ideal character” of objective intrinsic value
disregards the fact that, to a large extent, ideals are local: they vary with places and
times. The objectified ‘value’ masks the potential conflict of local ‘values’.
3. Objectified value and values thus appear irrefutable. Indeed, because you cannot be
against Justice, Good, Truth, etc., and more generally Value, for they appear to be uni-
versal and objective, you cannot contest their local definition either.
4. The local definition of value is aligned with a given social order. For instance, Nobility
is aligned with a hierarchical structure of society in France and Fairness with the idea of
free and equal citizens in the United States. Both values, which are objectified in both
societies, legitimise their elite (Bourguignon et al., 2001). The objectification of values
preserves the local social order.
To sum up, the use of the word ‘value’ includes a shift from subjectivity to objectivity,
which masks the local definition of values and further prevents them from being contested.
This process of objectification makes value appear as a kind of “natural”, then irrefutable,
fact, despite its subjective, then disputable, origin and nature.
3. Value creation: a four-step process of reification
In this section, I show that, like value, value creation is reified. I use the four-point grid
to show that (1) the instrumentation of the value to create (through objectives, performance
measures and other artefacts) makes its subjective nature disappear into an objective exter-
nal fact, (2) in addition, the conflict between stakeholders, in other words the subjectivity
about value to create, has been systematically underestimated and concealed, (3) this ob-
jectification of VC makes it irrefutable, and thus prevents any contestation, (4) this lack
of dispute contributes to maintaining the permanencies of social order, namely the status
of VC promoters (consultants, academics, executive managers, etc.) and the dominance of
some firms’ stakeholders (shareholders and customers) over others (workers, suppliers and
society).
For clarification purposes, the section begins with a brief presentation of the value creation
concept. Then the four steps of reification are examined.
3.1. Value creation: customer and shareholder perspectives
‘Value creation’ appeared in the mid-1980s, in association with two specific stakeholders
of the firm: its customer and its shareholder. A brief review of both approaches is useful
before broaching the question of the reification of value creation.
3.1.1. Customer value

Porter developed this concept in relation to the value chain, that is a collection of activities,
which form “the building blocks by which a firm creates a product valuable to its buyers”
(Porter, 1985, p. 38). According to Porter and his followers, value is clearly distinct from
price and refers to the customers’ needs:
Value is what buyers are willing to pay, and superior value stems from offering lower
prices than competitors for equivalent benefits or providing unique benefits that more
than offset a higher price. (Porter, 1985, p. 3)
Value is the judgement of society (notably the market and potential customers) regarding
the usefulness of the services offered by the firm in response to its needs. This judge-
ment is reflected in selling prices, quantities sold, market shares, revenue, quality image,
reputation . . . (Lorino, 1997, p. 67)
Thus, in economic value terms, Porter’s value refers to usage value, whereas price refers
to exchange value. According to this approach, exchange value is part of usage value and,
all things being equal, usage value generally increases when exchange value drops and vice
versa.
Customer value is also referred to in value analysis, the focus of which “is on the customer
and how customers determine the value of the product or service to them” (Monroe, 1990,
p. 88). Thus the so-called value analysis method, which is mostly used in reengineering and
product development, “attempts to determine the relative value (utility) buyers place on the
total product or service offering, i.e. the perceived benefits” (ibid.).
In management accounting, the difference between value and cost has been recurrently
emphasised. Some authors have made the point that the nature of value and cost is radically
different:
The economic viability of a business depends on its ability to ensure a satisfactory level
of net value increase for society: “is it worth” destroying the consumed resources (cost),
given the needs finally satisfied (value)? [original emphases]. (Lorino, 1997, p. 18)
It is commonly accepted that value does not depend on cost, although some costs (e.g.
research, training, etc.) may turn into value (Allen, 1996, p. 32). The opposition between
cost and value is commonly operationalised in the control of projects, which is partly based
on comparison between costs and valuable work (Town, 1998, p. 23).
Consequently, management control authors have recommended the design and implemen-
tation of methods recognising the centrality of customer value, such as the structuration of
management accounting along with activities and processes creating customer value and
the identification of cost drivers for each activity (Shank and Govindarajan, 1995, p. 61),
the use of target costing (Tanaka, 1989) or customer-oriented performance measurement
(Kaplan and Norton, 1992, p. 73).
3.1.2. Shareholder value

The other type of value currently in the limelight—shareholder value—is entirely differ-
ent. Rappaport (1986) is usually considered as the father of this very successful concept.
Various approaches have been developed by consulting firms, which sell “packages” mainly
focused on both questions of so-called value creation indicators, sometimes including reg-
istered trademark, and incentives.
Following EVA® (economic value added) (Stewart, 1991), considered as the most widely
used among VC indicators (Froud et al., 2000, p. 82), many variants have been suggested:
MVA (market value added), SVA (shareholder value added), TSR (total shareholder return)
and other acronyms. Entering into the complex technicalities of the various VC indicators
would exceed the scope of this article.7 The shareholder value concept is based on “a simple
definition of efficiency: an efficient firm increases the wealth of its shareholders” (Ponssard
and Zarlowski, 1999, p. 92). However, some significant differences may lie between its
indicators. For instance, both EVA® and MVA which stem from the Stern Stewart model
(Stewart, 1991, pp. 136–158) refer to different economic values. MVA, that is the additional
value offered to investors by the financial market (market value minus capital), unambigu-
ously refers to market, that is exchange value. On the other hand, the reference to either
7 Comparative reviews—e.g. Zarlowski (1998, 1999) or Froud et al. (2000)—offer an overview of these techni-
calities and their differences. For further details, the reader can consult Rappaport (1986) or Stewart (1991).
usage or exchange value is not clear regarding EVA® , which is the annual value exceeding
the cost of capital.
Value-oriented indicators are at the heart of value-based management, but shareholder
value promoters emphasise that they only make sense if they are the “centrepiece of an inte-
grated financial management system that encompasses the full range of corporate financial
decision-making”, if they “[put] all financial and operating functions on the same basis”, if
they “[provide] a common language for employees across all corporate functions” (Stern
et al., 1995, quoted by Froud et al., 2000, p. 84). Appropriate incentive packages are thus
presented as a key to success: economic value measures should be linked to the managers’
reward/appraisal systems to encourage behaviour consistent with increasing shareholder
value. For example, Stewart claims that “there should be only one cash bonus plan” and
that “the potential bonus should be unlimited in both directions” (Stewart, 1991, p. 249).
Besides, insofar as owners are both monetarily and “viscerally” engaged, “the most pow-
erful way to make managers into owners is to provide them with equity in the units they
manage and a means of cashing out the value they have created over a reasonable time
frame” (Stewart, 1991, p. 248).
To sum up, customer and shareholder values are both strategic concepts, which manage-
ment accounting actively contributes to implement. However, their content is very different,
which is consistent with the different expectations of both stakeholders towards the firm.
The role of management accounting towards VC, derived from its different contents, dif-
fers also. Customer value-oriented management accounting focuses more on systems and
their need of being oriented towards value, not only costs (as has been the traditional
case), whereas shareholder value-oriented management accounting mainly focuses on per-
formance measurement and its integration with decision-making, planning, evaluating and
rewarding processes. Finally, although customer and shareholder values both refer to ‘value
creation’ as the main strategic goal for the organisation, they appear as radically different
concepts.
3.2. The objectification of subjectivity
In spite of their differences, customer and shareholder values are subject to the same
process of objectification. This sub-section describes this process by which the subjectivity
of the stakeholder disappears and is replaced by an objective external quality. This shift
corresponds to the first step of the process of reification, as described in the first section.
Firstly, I describe how ‘value creation’ is driven from subjectivity to objectivity, and then I
use some elements of a case study (which was written for other purposes) as an illustration.
3.2.1. From the stakeholder’s subjectivity to external objectivity

For the description of this process of objectification, I shall refer to the different types of
philosophical value that have been reviewed in the second section. Indeed, all the meanings
of a polysemous word are virtually present simultaneously. Thus, in ‘value creation’, there
are both economic meanings of value (as has been documented above) and philosophical
meanings. The description takes an example in the customer value area. The generalisation
of the described process to other elements than those exemplified here and to shareholder
value is then discussed.
Subjective value for the stakeholder (H)
Instrumental objective value for the firm (H)
Intrinsic objective value for the firm (H and B)
Fig. 1. The process of reification of value.
For the customer, value is primarily subjective: a preference for a specific functionality of
the product and/or its quality, its after-sales service, its price, etc. relates to the customer’s
own subjectivity. Consequently, preferences, then value, vary from customer to customer.
Nevertheless, the product is generally aimed at a particular market segment, and the supplier
generally constructs an average representation of preferences, then value, for the typified
customer of the market segment. Thus, when the individual disappears into the collective
(even though it is a specific one), individual subjectivity is replaced by an appearance
of objectivity. For example, if quality has been identified as the subjective value for the
average customer, quality turns into an objective value. This objectification of value is
firstly instrumental. Indeed, quality has a value because it meets the customers’ needs,
and because it is useful for commercial strategy. In other words, while subjectivity turns
into objectivity, there is an additional shift from “outside” (the customer) to “inside” (the
organisation). The firm internalises the customer’s needs: what is good for the customer is
good for the firm. This is a first stage of the objectification of value: subjective value turns
into instrumental objective value.
Then, value is embedded into management systems: strategies, objectives, action plans
and performance indicators. This ‘instrumentation’8 of value turns instrumental objective
value into intrinsic objective value. Additionally, once shaped into management systems, a
value in a strategy becomes a value in itself, a value for the organisation. Thus this shift from
the instrumental to the intrinsic is simultaneously a shift from the have mode (H) towards
the be mode (B). This is a second stage in the objectification of value: instrumental value
turns into intrinsic value. Fig. 1 summarises the whole process.
I previously defined reification as a process, the first step of which is the transformation
of human subjectivity into objectivity and facts. At the beginning of the process that I have
just described, value originates in a living component of the customer’s subjectivity. At the
end of the process, this living element has turned into an external thing named value. The
whole process may be considered as implementing the first step of reification.
This process also applies to other elements than those exemplified here. Whatever its
original content (quality, service, etc.), customer value is always objectified and internalised.
The same is true for shareholder value. What precisely is value for the shareholder is
generally ignored or forgotten, and reduced to its daily artefacts, the value-based indicators.
8 By instrumentation, I mean the process that embeds value into management instruments.
3.2.2. An example
The implementation of an ABC system, as reported by Cooper et al. (1992), provides
an example of the process of instrumentation and internalisation of value. The following
fragment is specially illustrating:
The design team developed a value analysis scheme for activities to identify process
improvement and cost reduction opportunities. The activities were ranked according
to their importance for Farrall’s objectives and missions, as well as for value they
could provide to customers. Lengthy discussions among the team members eventually
produced the following definitions:
• Low: No value to either Farrall or the customer. The activity represents errors or
mistakes that ideally should not occur. Examples: defects, returns.
• Low–medium: Little to no value to Farrall or customer, but currently is necessary to
the process. Examples: materials handling, processing quality assurance reports.
• Medium: Supports the objectives and mission of Farrall but does not directly produce
a product or generate a sale. Examples: management reporting, general maintenance,
and setup.
• Medium–high: Supports production or development of a product or servicing of a
customer. Examples: welding shop, packing.
• High: Produces a product or generates a sales order. Examples: assembly and run time.
The team assigned a value ranking to each activity. Spears recalled, “This was a painful
process. Everyone had a different definition of what’s valuable to them. The concept,
however, tied closely to our quality program, and it got people’s attention” (Cooper
et al., 1992, p. 72).
Both stages of the shift described in the previous subsection are present in this fragment.
Indeed, it is remarkable that the customer is both the very focus and the great absent of the
ongoing implementation. Although (s)he is mentioned, directly or not, almost every two
lines, (s)he only exists in the team members’ representations, which, unsurprisingly, are very
different and thus difficult to reconcile. The design team outcome is a unique representation
that has a façade of objectivity and an instrumental value for the firm. Simultaneously value
is internalised: the supposed value for the customer becomes a value for the organisation.
This is the first stage of the process described in Fig. 1.
Moreover, the case study does not explain how the variety of actors’ representations co-
heres into a collective one. However, one can guess that the team’s representations of the
firm’s “objectives and missions” have played a significant role—not to mention power
and other social games. Indeed, in the fragment, these objectives appear to be almost
as important as customer value in identifying the level of value of activities. Besides it
should be noted that the so-called “objectives and mission of Farrall” are an objectified pre-
sentation of Farrall’s top management’s objectives. Only persons indeed have objectives.
Finally, the reconciliation of objectified customer value and objectified executive value
results in a segmentation of activities which will provide the basis for a cost accounting
system. Objectified value is instrumented. While the segmentation embeds value into the
accounting system, instrumental value turns into intrinsic value: activities are assigned a
value ranking and insofar as the segmentation does not keep any trace of its construction
process, the value of activities looks intrinsic. This is the second stage of the process of
objectification.
Objectification leaves its mark in the semantics of normative texts. For instance, when
Stewart (1991, p. 153) mentions “the intrinsic market value of any company” [original em-
phasis], he attempts to objectify market value, which basically is not an objective value.
Indeed, market value results from stock transactions, thus from investors’ subjective deci-
sions. Admittedly market value apparently stands above potential investors, but this does
not mean its being objective. The very fact that firms commonly develop stock acquisition
strategies to maintain stock value is a specific illustration of its non-objectivity.
To sum up, both the internalisation and instrumentation of VC in organisations means an
objectification of the value to be created. This shift of VC from subjectivity to objectivity is
all the more easily realised since reification is more or less inherent to its central concept,
value. Is this an unexpected consequence of a naı̈ve use of words or on the other hand, a
more or less consciously anticipated outcome of using an ambiguous signifier? This question
about the intentions of the promoters of value creation cannot be answered. However, the
following remarks about the systematic underestimation of the conflict between stakeholders
suggest that the semantic choice might not be an effect of chance.
3.3. The concealed conflict of stakeholders
I have defined the second step of reification as the masking of the subjective and conflicting
reality under an appearance of objectivity. This sub-section discusses the different faces
of this concealment. Indeed, the camouflage directly results from the instrumentation of
VC, as described in the previous sub-section: when objectivity replaces subjectivity, this
latter is masked. However, there are more active and direct ways of masking subjectivity,
namely the direct and indirect denials of the potential conflicts between subjectivities. In
other words, while instrumentation surreptitiously substitutes objectivity for subjectivity,
discourse explicitly denies subjectivity. Both actions result in a shift towards objectivity and
in the concealment of subjectivity. With respect to my four-point grid, this means that step
2 is not only a consequence of step 1 (subjectivity is masked because of objectification),
as has been presented up to now, but that in some cases, step 2 might precede step 1 (the
camouflage of subjectivity creates objectivity). However, whatever the direction of causality,
the common outcome consists in the concealment of subjectivity and its replacement by
objectivity.
This sub-section investigates the three modes of denial of the subjectivity of VC. Firstly,
the common-rule polarisation on two among many stakeholders, namely the shareholder and
the customer, masks the existence of other disregarded stakeholders. Thus, this dualisation
of VC indirectly denies the potential conflicts of disregarded stakeholders’ values. Secondly,
the affirmation of the convergence of customer and shareholder values directly denies the
conflict of both perspectives, then any subjectivity. Thirdly, in the rare cases when other
stakeholders are involved, there are vigorous claims that their interests do not conflict with
those of customer and shareholder. This sub-section successively examines these three
arguments. For each of them, I emphasise the gap between the reified world and the real
one, as shown in Table 1. The reified (objective) world is described in normative texts about
value creation, whereas the real (subjective) one is revealed by non-normative literature.
This leads to the conclusion that things are not as they are described in normative literature,
in other words that normative literature denies and covers up reality.
3.3.1. Many missing stakeholders

Normative literature about VC exclusively focuses on customer and shareholder values.
However, the customers and the shareholders are not the firm’s only stakeholders. Various
academics have emphasised that other stakeholders could be interested in the question of VC.
Thus Charreaux and Desbrières (1998, p. 59) coined a general definition of value which, they
claimed, is valid for shareholders and customers, but also for executive managers, employees
or financial creditors. Besides Nørreklit (2000, p. 78) pointed out that the balanced scorecard,
which is claimed to be the very place of inclusion of various stakeholder values (as will
be documented in the next paragraphs), did not mention potentially strategic stakeholders
such as public authorities and network relationships.
The reduction of a multiplicity to a duality of stakeholders hides the multiplicity of values
and their possible conflicts. For instance, regarding environmental costs, there is a funda-
mental opposition between the shareholder value perspective, which leads to maintaining
them, and the public authorities’ perspective, which favours their development. Moreover,
as will be documented below, there is a basic inevitable conflict between suppliers and
shareholders about materials and other supply costs, and between shareholder value and
personnel value on the subject of wages.
Thus, the polarisation on customer and shareholder values and the frequent disregard
of other stakeholders means a reduction of the subjectivity of values and a denial of their
possible conflicts.
3.3.2. Do shareholder and customer values converge?

Claiming that shareholder and customer subjectivities converge is another way of denying
them. The most significant contributions to the question of the convergence of shareholder
and customer values lie in two methods claiming explicitly to encompass these values: (1)
the balanced scorecard, (2) the intellectual capital (IC) approach.
The BSC is presented as a performance measurement device integrating, in a chain of
cause-and-effect relationships, the perspective of various stakeholders. The causal relation-
ships are the following: measures of organisational learning and growth → measures of
internal business processes → measures of the customer perspective → financial mea-
sures (Kaplan and Norton, 1996, p. 31). While it is explicit that financial and customer
perspectives’ measures relate to shareholder and customer values, the internal-business-
process measures focus on “various business processes, which create customer and share-
holder satisfaction” (Kaplan and Norton, 2001a, p. 23) and it is emphasised that while
customer and internal-business-process perspectives represent the “short wave of value
creation”, the innovation process is the “long wave of value creation” [original emphases]
(Kaplan and Norton, 1996, pp. 27–28). In other words, the BSC offers a framework (1)
claiming to reconcile customer and shareholder values, (2) in which customer value is seen
as a means towards shareholder value.
Market value = Financial capital + Intellectual capital

= + Human capital + Structural capital
= + + Customer capital + Organizational capital
= + + + Innovation capital + Process capital
Fig. 2. The key blocks of the intellectual capital method (adapted from Edvinsson and Malone, 1997, p. 52).
The IC approach, originally developed at Skandia,9 offers a model of components of

market value (i.e. shareholder value). It defines various types of capital explaining the
difference between market value and book value (or financial capital), shown in the following
formula (Edvinsson and Malone, 1997, p. 52) (Fig. 2).
Intellectual capital is defined as “the possession of the knowledge, applied experience,
organisation technology, customer relationships and professional skills that provide Skandia
with a competitive edge in the market” (Edvinsson and Malone, 1997, p. 44) and its promot-
ers claim that “the merging of the three types of capital [human, customer, organizational]
along with knowledge management, creates the desired outcome. . . an organization so
aligned and balanced as to create the best possible financial capital (value)” (Edvinsson and
Malone, 1997, p. 146). Thus the quality of customer relationships (or customer capital) adds
to market value. In other words, the causal relation customer satisfaction → shareholder
value that was assumed in the BSC is also to be found in IC. Moreover, the model targets
navigation, with the help of a “navigator”, that is a collection of indicators related to five
intertwined areas of focus, which only differ from those in the BSC in the addition of a
‘human focus’ (Edvinsson and Malone, 1997, p. 68). As in the BSC, the customer focus
sustains the financial focus (ibid.).
Finally, both models highlight the importance of managing and measuring intangible as-
sets for increasing both customer and shareholder value.10 For example, Kaplan and Norton
claim that “the Balanced Scorecard can use strategy maps of cause-and-effect linkages to
describe how intangible assets get mobilized and combined with other assets, both intangi-
ble and tangible, to create value-creating customer value propositions and desired financial
outcomes” (Kaplan and Norton, 2001a, p. 68). In the Edvinsson and Malone model, the
contribution of intangibles to customer and shareholder values is also established, insofar
as the outcome of IC (equalised with “immaterial assets”, and including customer capital)
management is EVA® (Edvinsson and Malone, 1997, p. 59).
So, although there are some significant differences between both models (especially
the centrality of the human focus in the IC model; Edvinsson and Malone, 1997, p. 68),
these models claim to integrate customer and shareholder value, with the latter being the
consequence of the former and the ultimate organisational aim.
However, this consensus about the convergence of shareholder and customer values is
not unproblematic to a number of researchers. Thus Nørreklit (2000, p. 77) suggested that
the relationships between the four parts of the BSC are more finality than cause-and-effect
relationships. A finality relationship is a question of human will (I see, and act, A as a means
to B); it does not rely on empirical proof as a cause-and-effect relationship does—if ever
9 The first public diffusion of the model dates back to 1994, as a supplement to the Skandia Annual Report
(Edvinsson and Malone, 1997, p. 53).

10 See also Pierrat and Martory (1996).
causality may be inferred from a co-variation. For instance, Nørreklit explains, in the BSC,
the customers’ satisfaction is supposed to be a condition of financial success, but there exist
some satisfied customers who are not profitable, such as loyal, thus supposedly satisfied
customers who place small orders, or buy customised low-price products (Nørreklit, 2000,
p. 73). In other words customer value does not necessarily converge with shareholder value.
This convergence has also been addressed by Ittner and Larcker, who reviewed re-
search about the convergence of financial and non-financial performance measures. In-
deed, financial measures relate to shareholder value, whereas, directly and indirectly, many
non-financial indicators are associated with customer value.11 Ittner and Larcker report dif-
ferent studies producing mixed results in investigating the link between non-financial mea-
sures and future accounting or stock price performance (the link may be positive, negative
or insignificant) (Ittner and Larcker, 1998, pp. 218–220). Thus customer satisfaction does
not necessarily imply profitability. The quality → customer satisfaction → profitability
relationships have also been investigated qualitatively by Pascail (2000). He observes that
total quality sometimes means over-quality costs, and no extra customer satisfaction, be-
cause the customer values the product being adapted to his/her use and expectations, but
not necessarily conforming to very high pre-established norms.
The convergence of customer and shareholder value can also be altered by a change in the
definition of shareholder value. Thus Cormier and Magnan have suggested that investors
would be interested not only in profit and stock value, but also in environmental care and
ethics. Indeed, they partly attribute the development of environmental accounting to the
emergence of “ethical investors (. . . ) concerned as to how firms acquit themselves of their
social responsibilities” (Cormier and Magnan, 1997, p. 216). If shareholder value is not
what it is claimed to be, its convergence with customer value has to be reconstructed.
To sum up, the assumed convergence of customer and shareholder values appears prob-
lematic. Indeed, a satisfied customer does not necessarily make a happy investor and more-
over, an oversimplified representation of a happy investor may have been developed.
3.3.3. An unsound convergence of all stakeholders’ interests

The very few authors that have partly but explicitly addressed the question of the missing
stakeholders argue that they are actually included in their model, so that there is no conflict
between their respective interests. Let us consider the following extract:
(. . . ) some people have expressed concern that although the Balanced Scorecard ex-
plicitly recognizes the interests of shareholders and customers, it does not explicitly
incorporate the interests of other important stakeholders, such as employees, suppliers,
and the community. The employee perspective is certainly incorporated in virtually all
scorecards within the learning and growth perspective. Similarly, if strong supplier re-
lationships are part of the strategy leading to breakthrough customer and/or financial
performance, the outcome and performance driver measures for supplier relationships
should be incorporated within the organization’s internal-business-process perspective.
(Kaplan and Norton, 1996, pp. 34–35)
11 For instance, since the quality of the internal processes is supposed to increase customer satisfaction, there is
an indirect association between process-related measures and customer value.

However, Kaplan and Norton’s argument is not very convincing. Indeed, the personnel
are not only interested in learning, as Kaplan and Norton suggest, but also in wages. The
same point can be made about suppliers, whose relationship does not rely only on qualitative
elements, as suggested, but also on elements concerning the financial terms of exchange. In
“forgetting” some of the various interests of workers and suppliers (specially those which
potentially conflict with those of the firm), Kaplan and Norton implicitly deny the conflict
of values.
In the following excerpt, the question of work force compensation is explicitly recognised,
but the basic divergence between an “attractive compensation” and shareholder value is just
ignored:
Favouring long-term shareholder value does not necessarily mean ignoring the other
stakeholders and their expectations. Shareholder value creation makes it necessary to
have ever more satisfied customers, with good products, developed by motivated and
skilled personnel, in relationship with the best possible suppliers and subcontractors,
while respecting public regulation. Hiring and keeping the best engineers and salesper-
sons is indispensable to create value. They must be offered attractive compensation and
working conditions. As for clients, it is needless to recall the importance of listening to
them in a worldwide competitive economy. (Albouy, 2000, p. 374)
This excerpt shows how stylistic devices may be useful to highlight the supposed con-
vergence of all stakeholders’ interests. Thus, the second sentence of the last quotation
juxtaposes various stakeholders’ interests, without any clear argumentation of their conver-
gence. The lack of apparent hierarchisation gives the impression of convergence of a priori
equal stakeholders. Further, as explained above, all the so-called necessary and obvious
claims are fallacious.
Finally, a last example of the fallacious convergence of customers and citizens’ interests
is also provided by the following quotation:
Value is the judgement of society (notably the market and potential customers) regarding
the usefulness of the services offered by the firm in response to its needs [emphases
added]. (Lorino, 1997, p. 67)
Market is not society, and all society’s participants are not potential customers, far from
it. Indeed, Boyce (2000) demonstrated that “the idea of customer focus has never been to
focus on all customers, but on a select, target group” [original emphasis] (p. 661), those
who are the most profitable. The previous excerpt is a relevant illustration of how customer
value creates “a public impression that the needs of all people are best served under this
framework” (Boyce, 2000, p. 674).
In short, this critical analysis of normative texts and their confrontation with research
notes exhibits (1) the incompleteness of the usual dual perspective (there are more than
two stakeholders regarding VC), and (2) the very problematic convergence of customer and
shareholder, and further, other stakeholders’ values. Together these two elements result in
a reduction and oversimplification of a complex reality regarding VC. The reality is that
there are many stakeholders, and then as many definitions of VC. The reduction is made
either through leaving aside stakeholders and/or through claiming that the remainder have
convergent interests. As a result, in the reified world, VC is presented with a façade of
unity, which hides a reality of multiple subjectivities and their potential conflicts. This is
the second step of the reification process. This denial of subjectivity and the appearance of
convergence and unity about VC makes it appear objective.
Thus the discourse about value creation reinforces the effects of its instrumentation
analysed earlier. Discourse and instrumentation together result in an objective and non-con-
flicting façade, which is a condition of the concept’s irrefutability.
3.4. Towards irrefutability
In the first section, I have defined the third step of reification as a consequence of the
objectification of subjectivity, namely the prevention of dispute regarding the reified object.
In this section, I draw on semiotic and rhetoric to show that hiding the subjectivity of value
creation under an appearance of objectivity “naturally” leads to its irrefutability.
From a semiotic perspective, the exclusion of subjectivity can be considered as the elim-
ination of an enunciation mark. The most common way of erasing the enunciation mark
consists in replacing “I think that . . . ” by “it is certain that . . . ”. This usual semiotic pro-
cess enables the transformation of “a contingent point of view into a self evident natural
image” and endows the speaker with the “role of simple executor of a program imposed
from outside” (Marion, 1993, p. 54). Substituting objectivity for subjectivity operates sim-
ilarly. It transforms a contingent, local and subjective strategic choice into a quasi-natural
obligation. It turns top managers who intentionally choose the organisational strategies into
executors whose hands are bound in front of the ‘natural’ fatality of VC. Thus VC turns into
a fact of nature, and who discusses natural facts? The objectification of VC thus contributes
to its irrefutability.
The objectification of VC may also be analysed under a rhetorical perspective. According
to Aristotle (1998, pp. 22–23), rhetoric is “the ability to discover in everything what brings
persuasion” and discourse may bring three technical12 proofs: (1) the authority of the
speaker (ethos), (2) the emotion given to the auditor (pathos) and (3) the argument-based
demonstration (logos). The remainder of this subsection shows how the pseudo-objectivity
of VC is not emotionless (pathos), how it uses some biased arguments (logos), and how
these rhetorical aspects of VC discourage any debate on the subject.
3.4.1. Emotion-based persuasion

The objectification of VC makes its local and subjective content disappear. Then, the
auditor’s attention is focused on the objectified expression ‘value creation’. I argue here
that this coinage appeals to the auditor’s emotions in different ways. Some of my arguments
are illustrated by parts of VC discourses. However, empirical support is not always possible,
especially when emotion lies in the hidden and implicit representations of VC. In such cases,
the rhetorical power of ‘value creation’ lies precisely in the non-explicitness.
Firstly, emotion is associated either with positive images or with the escape of reverse
negative images. Value, as well as creation, convey both positive, then seductive images.
For example, if locally, value creation means decreasing the delivery time, value creation
12 “Extra-technical” proofs are external and given to the speaker (witnesses, written elements, etc.), whereas
technical proofs are related to him-/herself or to his/her (rhetorical) method.

appears a much more “valuable” and noble goal than improving the performance on this
grocery-sounding element. Furthermore, value creation is implicitly opposed to value de-
struction, which conveys a very violent image. Who would accept to destroy value? It is
not possible to be against value and against creation.
Furthermore, the seduction of the positive ‘value creation’ is frequently enhanced through
its opposition to a negative foil. For instance, the customer value perspective systematically
opposes cost and value, as shown in the following extracts:
(. . . ) “is it worth” destroying the consumed resources (cost), given the needs finally
satisfied (value)? [original emphases]. (Lorino, 1997, p. 18)
Appreciating the value before counting the cost. (Booth, 1997, p. 54)
In these examples, ‘cost’ is associated with an either radically negative or somewhat de-
spicable action (namely, destruction and counting) whereas the opposite ‘value’ is associated
with ‘satisfaction’ and ‘appreciation’—which sound inherently positive. Regarding share-
holder value, Stewart (1991, p. 13) associates his “new management model” with “dynamic”
and “decentralised”, as opposed to “static” and “centralised” capital structure strategy.
Value is also commonly associated with a new and saving “way of life”, whereas the foil
is associated with old manners and probable (or real) failure, as in the following excerpts:
If we look at the past, it is clear that we place the accent on cost, whereas if we look
towards the future, we might prefer value [emphases added]. (Pierrat and Martory, 1996,
p. 142)
In many companies the all-important quest for value is being confounded by a hopelessly
obsolete financial management system [emphases added]. (Stewart, 1991, p. 1)
In the shareholder value area, Froud et al. (2000, p. 90) note that consultancy firms largely
use as an “interpellative device” tables and diagrams which dramatise the gap between what
is and what ought to be. The association of ‘value’ and success is all the more likely to be
accepted by auditors as value and success belong to the same category of desirable things.
Very often, VC is presented as a miracle solution to performance management—and who
does not like miracles?
The following extract provides us with an example of the association of VC with an
accumulation of positively connotated then uneasily refutable words:
EVA, or economic value added, is a concept which imposes itself through its effectiveness.
It offers the principles of modern finance to management, in order to help managers to
create value [emphases added]. (Ehrbar, 1998, cover page)
Finally, ‘value’ is an ideal: there is no limit to value. This may explain why the concept
successfully cohabits with claims for continuous improvement, which also date back to
the 1980s and their emphasis on Japanese management methods (kaizen). In value, as in
continuous improvement, there is no limit—theoretically at least. The apparent unlimited
scope of VC is highly appealing if we assume that one of our major tasks as human beings
is to cope permanently with the frustration arising from the gap between “what we want
and can do, what we desire and must do” (Dejours, 1999, p. 90), that is, with our limits.
To sum up, ‘value creation’ appeals to the auditor’s emotion and further contributes to
his/her persuasion, because the words used convey very positive images and because, fur-
thermore, they are very often both opposed to negative representations and associated with
positive perspectives. These devices are not specific to the reification process.13 However,
the objectification of value enhances its ideality and thus gives additional credit to the pos-
itive associations and negative oppositions. Thus, the attractiveness of VC discourages the
auditor’s resistance towards the concept.
3.4.2. Persuasion through biased argumentation

The objectification of value sustains a fallacious argumentation, which also tends to
dissuade any debate. There are different kinds of flawed arguments. Firstly, the objectified
value abusively looks homogeneous, which discourages the discussion that would arise if
its heterogeneity were made more obvious. Additionally, the idealised and embellished VC
conceals the hyperbolic character of the oppositions and associations used. Indeed, a closer
look at these oppositions and associations suggests that, very often, only a small part of the
more complex and shadowed reality is presented, so that finally this oversimplified reality
does not need any discussion.
3.4.2.1. A far from homogeneous concept. The objectification of VC enables its promot-
ers to present it as a homogeneous concept. Thus, regarding shareholder value, although
both Stern Stewart’s measures (EVA® and MVA) have a heterogeneous content14 and an
ambiguous reference to economic value, they are claimed to be convergent. As Stewart
(1991, p. 153) states, “EVA ties directly to the intrinsic market value of any company. (. . . )
MVA = present value of all future EVA” [original emphasis]. However, Froud et al. (2000,
p. 99) have documented that EVA® and MVA gave very different—and even sometimes
quite opposed—images of the companies’ performance. Referring to an objectified concept
(value creation) instead of its various and divergent artefacts (indicators) prevents discussion
and possible dispute.
Besides, the objectification of VC, and its subsequent frequent absence of precise local
definition, also enhance the vagueness of the concept. Nørreklit (2003) suggests that the use
of imprecise concepts makes it difficult to discuss their content and Landry (1995, p. 122)
has emphasised that such use is specially beneficial on the subject of organisational goals,
about which various social groups could disagree and then engage in expensive conflicts.
These general remarks apply to VC. Using the generic and objectified ‘value creation’
instead of its local content prevents, at least in the short term, the conflicts that would
probably occur if the concept was made clearer.
3.4.2.2. Hyperbolic oppositions. I have mentioned earlier some examples of oppositions

between new and promising value and its unattractive past foils. Regarding customer value,
the opposition of cost to value is not as indomitable as usually suggested. Value management
can be, amongst other things, cost management. Cost is nearly always a key factor of success,
13 For instance, Boje et al. (1997) showed how the promotion of reengineering used the same kind of oppositions
and the same promises.

14 Profits, conventional cost of capital and capital for EVA® , and stock value and capital for MVA, respectively.
even though, in most cases, it is no longer the foremost of such factors. Cost reduction
makes price reduction possible, and therefore, all other elements being constant, increases
the value of the product. Customer value-based management systems always take costs
into account, even though their designers generally emphasise more innovative aspects of
VC (for example, reengineering of resource consumption, encouragement of transversal
co-ordination).
A similar hyperbolic analysis can be applied to the shareholder value concept. While
shareholder value is claimed to be a radically new approach, calling for “nothing less
than a revolution in thinking” (Stewart, 1991, p. 1), various authors have challenged its
innovativeness. Thus Bromwich and Walker consider that the concept is not really new,
but offers a rearrangement, and thus is nothing more than the re-emergence, of the older
residual income measure, used during the 1950s and the 1960s by the General Electric
Company (Bromwich and Walker, 1998, p. 392). Similarly, Froud et al. (2000, p. 85) have
noted that it is “sometimes difficult to distinguish between the prescriptions of the new
financial metric consultancies and those of their precursors a generation or more ago”, and
further that “financialization does not connote important real changes (. . . )” (ibid., p. 104).
Regarding customer value in general, it can be argued that, in other terms, customer
value has been scrutinised for a long time, at least since the expansion of marketing in the
1960s. Thus there are no major content differences between the above quoted definitions
of customer value (Porter, 1985; Lorino, 1997) and the following extract which dates back
more than 30 years:
People spend their money not for goods and services, but to get the value satisfaction they
believe are bestowed by what they are buying. (. . . ) The marketing view demands the
active recognition of a new kind of competition that is galloping ascendance in the world
today. This is the competition of product augmentation: not competition between what
companies produce in their factory, but between what they add to their factory output
in the form of packaging, services, advertising, customer advice, financing, delivery
arrangements, warehousing, and other things that people value [emphasis added]. (Levitt,
1969, p. 2)
Thus, the opposition of the supposedly new value creation to outdated methods appears
largely hyperbolic. The difference between old and new is much less limited than claimed.
Hyperboles are useful to discourage dispute about the implementation of new manage-
ment instruments. If new instruments do not appear different enough from the old ones,
participants can argue about the cost/benefit ratio of the change. Thus abusively emphasis-
ing the innovative aspects of new methods reduces the level of dispute about the need of
implementing them.
3.4.2.3. Hyperbolic associations. The association of value creation and success, indeed
even miracle, appears also disputable. Drawing from a British firms-based analysis, Froud
and her colleagues document that “the discourse of consultancy typically focuses on excep-
tional firms” (2000, p. 94), whereas average performance is generally much less conclu-
sive. Additionally they observe a persistent gap between expectations and outcomes (ibid.,
p. 103), and they note that the sectoral affiliation exerts a large influence on the returns
obtained (ibid., p. 98). Finally, VC is not always what it promises, far from it. These hyper-
boles enable the masking of a shadowed reality behind a façade of universal, thus irrefutable
success, and further, they enhance the irrefutability of the VC concept.
In short, the objectification of VC turns it into a homogeneous, idealised and attractive
concept, which is thus made very difficult, indeed even impossible to refute. This embel-
lishment further contributes to masking the lack of soundness of some arguments made by
VC promoters, which adds to the irrefutability of the concept. This is the third step of the
reification of VC. This analysis of the rhetoric of VC is not inconsistent with field research,
which sometimes analyses the adoption of value based management as merely rhetoric
(Malmi and Ikäheimo, 2000). What is the use of this rhetoric?
3.5. The maintenance of social order
The fourth step in reification of VC is the preservation and continuation of social order.
This subsection shows how the irrefutability of the objectified VC maintains the permanen-
cies of social order. I examine social order firstly at the micro (organisational) level, and
then extend the analysis to the macro (societal) level. Each investigation reveals that the
continuation of social order benefits a few social actors at the great expense of many others.
These are the profits and losses of reification.
3.5.1. The legitimisation of organisational order

The lack of dispute about VC has various consequences in organisations. I distinguish here
between managers who promote VC and participants who are expected to adopt the suppos-
edly new concept without resistance. For a manager, successfully implementing a manage-
ment innovation is a source of legitimacy, both inside and outside the organisation. In organi-
sations, the low degree of resistance and dispute which directly results from the irrefutability
of VC is an invaluable help for successful implementation and managers’ internal legitimacy.
Furthermore, the successful implementation of innovative management methods brings ex-
ternal legitimacy. If adopting institutionalised innovations (as is the case of VC) enhances
institutional isomorphism and firms’ legitimacy (DiMaggio and Powell, 1983, p. 151), it also
enhances the legitimacy of their executive managers, as well as their employability. Globally,
the irrefutability of VC increases the present legitimacy and the future status of managers.
VC offers justification for management decision in general. With a customer value ori-
entation, decision relates to commercial (price, distribution, etc.), logistic and/or industrial
arrangements (just-in-time production and delivery). Very frequently customer value means
production and delivery time reduction, increased quality and flexibility. These demands
are synonymous of aggravated pressure and stress. Thus Perilleux’s biography-based em-
pirical research shows that flexible production means an uneasy change in the exercise of
authority (Perilleux, 2001, p. 156), a feeling of being permanently controlled (ibid., p. 159),
visible (ibid., p. 164) or trapped into insoluble double binds (ibid., p. 163) and a loss of
professional identity (ibid., p. 161). A permanent anxiety and fear of failure are the conse-
quences of flexibility, and they turn into feelings of helplessness when failure occurs (ibid.,
p. 166). The biography studied by Perilleux ended with depression and a suicide attempt.
Flexible production also means flexible working hours, thus a deterioration of working con-
ditions (Perilleux, 2001, p. 41) and an increased proportion of temporary jobs (Boltanski
and Chiapello, 1999, p. 456).
From a shareholder value perspective, decision is often associated with cost cutting.15
At best, cost cutting means wage cutting, mainly because, in most places, labour is the
largest controllable element of cost (Froud et al., 2000, p. 108). Moreover, in a number
of cases, VC contributes to downsizing, restructuring and concentration. Thus, a compar-
ative study of firms whose managers were compensated on the basis of either EVA® (or
any other type of residual income) or traditional accounting earnings demonstrated that
EVA® -based compensation leads to the decision to divest assets (Wallace, 1997, p. 287). In
general, downsizing is highly detrimental to all the participants involved. Unemployment is
considered to be an aggravating factor in depression and suicide (Boltanski and Chiapello,
1999, p. 508). Those who keep their job suffer various negative feelings (anxiety, grief,
etc.) that can be associated with a mourning process (Dubouloy and Fabre, 2000) or with a
feeling of positive inequity (or “survivor’s guilt”) (Brockner et al., 1986). Besides, perma-
nent restructuring, which has been the rule for years in some sectors like agro-chemistry or
pharmaceutics, maintains a permanent stress and feeling of insecurity on firms’ personnel.
Thus, throughout the whole process and whatever the personal way out, downsizing entails
psychological suffering, which frequently turns into depression or a reversal towards oneself
of the violence undergone (somatisations, accidents). Globally, downsizing has damaging
effects on a person’s life, physical health and psychological well-being (Dejours, 1998).
Thus, whatever the perspective, workers are disposed in response either to demand fluc-
tuations or to financial market return requirements, and the cost of this disposal is very high
for workers. As Berry observed in an exploratory research, workers “are tools, not partners”
(Berry, 2000). Thus, not only do workers not benefit from value creation, but they pay for it.
3.5.2. The unequal distribution of value in society

The various contributions of personnel to the VC process raise the question of the dis-
tribution of the value created, at the societal level. Indeed, the question of distribution “is
inherent to economic processes” (Bessire, 1999, p. 106), because the wealth created is not
endless, so that what is given to some is not given to others. This question of distribution
brings us back to the point of multiple and potentially conflicting stakeholders—which,
as documented earlier, is systematically denied. Actually the denial masks choices that
maintain social permanencies: workers create value for customers and/or shareholders.
Drawing from macroeconomic data, Froud et al. (1996) have documented how the in-
evitable stakeholders’ conflict has been resolved at the expense, sometimes of suppliers,
always of employees. They draw on comparison between British Gas and British Telecom
that when the company has a high purchase/sales ratio, squeezing suppliers is a means
of generating a surplus for distribution to shareholders (Froud et al., 1996, pp. 125–126).
When the purchase to sales ratio is low, the leverage of squeezing suppliers is limited and
VC means reducing either the wages or the number of employees. Thus, since its first year of
operation, the privatised utility sector in the United Kingdom has sacked more than 30% of
its workforce, and 92% of these lost jobs could have been maintained if the cash distributed
as dividends had been used instead for paying wages at the average rate prevailing inside
the companies. Thus the symmetry of redistribution appears “near perfect” (Froud et al.,
1996, pp. 127–128).
15 This is also true under the customer value perspective, when it means price attractiveness, then cost reduction.
Not only does unemployment have damaging effects on those made redundant, it also has
an impact on their families and society in general. Unemployment increases poverty; it leads
to social destructuration, the global “cost” of which goes far beyond accountable welfare
expenses. From an ethical standpoint, unemployment also develops a shared vision that the
suffering involved has become “a feature of everyday life”, that operates defensively against
everyone’s consciousness of his/her own complicity and responsibility in social adversity
(Dejours, 1998, p. 22). Quantitatively, the cost of professional stress is estimated at 200
billion dollars in the United States and about 10% of gross national product in the United
Kingdom (Chanlat, 1999, p. 29). Admittedly, VC alone is not responsible for unemployment
and professional stress. However, it actively contributes to their societal costs.
This profit and loss accounting of VC should not overlook the consultants and academics
who promote it. They rank alongside company executives as those who stand to gain. Indeed,
objectified, embellished and indisputable value adds to their legitimisation (and business!).
Parker (1994) has suggested that accountants have on occasion used words to enhance their
prestige, distinguishing for example, between ‘book-keeping’ and ‘accounting’. I suggest
here that, similarly, ‘value creation’ which is an idealised way of referring to shareholder
or customer interests also enhances the prestige of its various promoters.
To sum up, the objectification of VC and its subsequent irrefutability maintain and legit-
imise social order in organisations and in societies. Indeed, irrefutability makes critic and
voice very difficult, so that the organisations’ participants, who additionally appear to be
the “weak link” in the VC process, are the main losers of the VC game. The lack of resis-
tance towards VC offers legitimacy, and further increased social status and wealth to top
managers, academics and consultants. Customers and shareholders are the great winners
of the VC game: they capture the value created by other stakeholders, mostly participants
and suppliers, and beyond society which finally pays for the detrimental effects of VC on
workers. Thus the objectification of VC contributes to maintaining the usual distribution
of wealth, i.e. in capitalist economies, the domination of capital over labour, and in their
organisations, the supremacy of market relationships (goods, service or financial markets)
over the other relationships of the firm.
4. Discussion and conclusion
In this article I have addressed some unresolved questions about the concept of VC
and its multiple variants, namely the contradiction between its recurrent presentation as a
simple, all-inclusive and consensual notion and its actual complex, multidimensional and
conflicting nature. To analyse this inconsistency, I have referred to the Marxist concept
of reification and suggested defining it as a process in which a shift from subjectivity to
objectivity (first step) results in the masking of the real subjective world and its potential
conflicts (second step), in order to prevent social dispute (third step), and further maintain
social order (fourth step).
Applied to value creation, this four-point grid helps to show how the inescapable conflicts
of our subjective management world are objectified, therefore masked, both through the
instrumentation of the value to create (through objectives, performance measures and other
artefacts) and through the systematic denial of the conflict between stakeholders. Together
management practices and discourses make the subjective nature of VC disappear into an
objective external fact (first and second steps of reification). Furthermore, this objectification
enables various semiological and rhetorical uses of the word, which makes the concept
hardly contestable, then almost irrefutable (third step of reification), so that, finally the
permanencies of social order are maintained, namely the dominance of some stakeholders
(shareholders and customers) over others (workers, suppliers and society) (fourth step of
reification). VC appears thus reified, and, as was the case with Marx’s commodity fetishism
(the original type of reification), reification results in the alienation of the dominated parts
of society. In today’s companies, the value distributed to shareholders and/or customers is
primarily created by employees (secondarily by suppliers), and beyond them, society. The
cost of the value created is very high in terms of psychological and physical well-being for
individuals, in financial and ethical terms for society.
This analysis explains the lack of critical distance of the promoters of VC (consultants,
academics, executive managers, etc.)—the starting point of my investigation. These persons
appear as both the craftsmen and the beneficiaries of the reification of VC. Indeed, in denying
the stakeholders’ conflict, they mask the subjectivity of VC behind a veil of objectivity, thus
they actively contribute to its reification. Finally, they draw increased prestige and status
from the idealised, embellished and reified value creation. Myopia here is not an accident
but an active contribution to the permanencies of capitalism.
In the remainder of this final section, I will (i) address some complexities hitherto left
aside in order to clarify the argument, and (ii) discuss the contribution of this analysis
with regard to prior literature on adjacent themes, in particular managerial innovation and
the governmental role of accounting. Finally, new research directions, as well as practical
implications, are suggested.
4.1. Some unresolved complexities
The argument above relies on categorisations. Thus, in the previous sections, I have
differentiated between customers, shareholders, personnel, suppliers, etc. This is prob-
lematic, for at least two reasons. First, for instance, referring to a generic Consumer as-
sumes that all customers are alike, that they share the same interests—which is obviously
not the case. Categorisation erases the individuality of actors and turns their unique sub-
jectivities into an appearance of objectivity. Actually categorising implements the first
step of reification. In other words, while I was considering market segmentation and
studies contributing to the reification of value, I was involved in the same process of
reification . . . However, categorisation appears as an ineluctable fact of language and
representation. Indeed, as soon as we want to think about, describe and understand the
world, we need words and categories. There is no way out of this paradox—but mentio-
ning it.
Second, the analysis has used these categories in an exclusive way. For instance, I have not
acknowledged that some customers are also shareholders of the company whose goods they
buy; that in companies, most executive managers and, sometimes, personnel are actual or
potential shareholders; or that, more generally, any stakeholder is a citizen. This “osmosis”
clearly shows again the limitations of categorisation and, furthermore, it adds complexity to
the analysis above. Because it leaves open the question of what the ‘values’ of the persons
involved in such role conflicts are, it makes problematic our straightforward conclusion that
some stakeholders create value for others.
Finally, there is also both a paradox and a dilemma around the normative conclusion of
the analysis. The paradox is similar to the one mentioned above. While the text deconstructs
normative positions, it ends with a normative conclusion. Indeed, the denunciation of detri-
mental effects implicitly suggests that they should be avoided or at least released. Such a
conclusion also introduces a dilemma, inasmuch as it overlooks the fact that change always
hinders some persons’ interests. Actually change always navigates between conflict of in-
terests: what changes, if anything, is the identity of who will pay the cost. Such dilemmas
are inherent to change, and cannot be solved by normative positions.
4.2. Reification and managerial innovation
VC appears as a so-called managerial innovation. In this section, I discuss the contribution

of the reification framework to the understanding of managerial innovation with a view to
prior related works.
First, the above analysis can be associated with the broader analysis of change in the
“spirit of capitalism”. Expanding the Weberian concept, the French sociologists Boltanski
and Chiapello define the spirit of capitalism as “a set of beliefs, associated with the capitalist
order, which contributes to justifying this order and to supporting, in legitimating them,
the consistent modes of action and arrangements” (Boltanski and Chiapello, 1999, p. 46).
Because it needs a highly committed workforce, capitalism has to look attractive both to its
current and future managers. Therefore the spirit of capitalism, in showing how capitalism
brings enthusiasm, offers justification for being involved in it (Boltanski and Chiapello,
1999, p. 53). These justifications are historically shaped and they change over time to
adapt and answer to critics (mainly sourced in social and artistic criticism), so that finally
capitalism retains its attractiveness. The spirit of capitalism is embodied in management
methods—“one of the main places where the spirit of capitalism is inscribed” (Boltanski
and Chiapello, 1999, p. 94). Therefore, management methods change along with the spirit
of capitalism. These changes enable capitalism to keep its attractiveness and thus to endure.
The “spirit of capitalism” offers an interesting framework for analysing so-called innova-
tive management methods and their promotion. Here, it is noteworthy that the supposedly
new and all-embracing concept of value creation is aligned with the 1990s spirit of cap-
italism which values networks and multiple stakeholders (Boltanski and Chiapello, 1999,
p. 116). VC includes highly appealing representations, that are likely to arouse enthusiasm,
and then commitment to capitalism. However, as documented above, VC, which is not as
new as it is said to be, appears to be the new script for profit making or/and increased sales,
which have always been the cornerstones of management and capitalism. Attractive value
creation contributes to justifying and maintaining capitalism.
Furthermore, this analysis suggests that reification could play a significant role in the
path of change of the spirit of capitalism. Indeed, Boltanski and Chiapello have extensively
documented the shift of the spirit of capitalism between the 1960s and 1990s (1999, Chapters
1 and 2, pp. 93–240), and shown how changes in capitalism and in its spirit during this
period responded to both social and artistic criticism. However, they have not investigated
in depth how those concerned have been made to adhere to the new spirit of capitalism, and
further to new management methods. Indeed, not all managers are critical and therefore,
prepared for a change in the “set of beliefs” with which they are in apparent agreement.
Boltanski and Chiapello (1999, p. 94) suggest that normative management literature, which
gives information about the latest management innovations, diffuses the new spirit among
managers. Our analysis suggests further that reification could be a powerful device in
making the new spirit (and aligned methods) quickly accepted by the audience. Indeed, the
objectification which is at the core of reification makes the reified object hardly disputable
and refutable. Reification is a powerful weapon of persuasion, and a valuable device for
making shifts in the spirit of capitalism appropriated by managers.
Second, there is no discrepancy between the way we can understand the development of
value creation at the turn of the 1990s as expressing a renewal in the spirit of capitalism and
Miller and O’Leary’s (1990) propositions of considering accounting innovation as “in part
a cultural process” (p. 485). These authors explain how the invention of leadership during
the 1930s in the United States made it possible to answer and disarm criticism against
autocratic authority (ibid.) and how this was done by removing “the issue of authority in
enterprise from a political register and [inscribing] it within a neutral and technical one”
(ibid., p. 492). Similarly, value-based accounting practices present as “natural” and clothed
in technicalities the political choices of management—which discourages dispute and voice.
Third, the present analysis can be linked with some language-based critical analyses of
fashionable management methods. For instance, Boje et al. (1997), who have deconstructed
reengineering, describe ‘storytelling’ as “a powerful way for executives and their consultants
to challenge the old story of their organisation with a new story”, and then allow their
“organisation, adapted to yesterday’s world, (. . . ) to reinvent (. . . ) itself in today’s new and
more competitive world” (Boje et al., 1997, pp. 631–632). New and old stories have the
same roots and the new story is just another version of the old one. Storytelling, Boje et al.
argue, uses ‘doublespeak’, that is “the using, creating, or attaching of words to a concept that
have a more neutral or positive connotation than the word or words commonly employed,
those traditionally linked to the concept” (Boje et al., 1997, p. 646). Doublespeak acts as a
new packaging for old concepts, and then enables storytelling, in order to “secure support
for a (. . . ) concept towards which an audience is unfavourably or negatively predisposed”
(Boje et al., 1997, p. 646).
There are many common points between the present analysis and the concepts developed
by Boje et al., which appear highly relevant to value creation. Indeed, as shown above, new
‘value creation’ has both a neutral and positive connotation (doublespeak), but a rose by any
other name would smell as sweet: the concepts involved in ‘value creation’ are the same
as those designated under traditional and less attractive words (customer satisfaction, profit
making). Consequently, VC is one of the new stories which enable organisations to adapt
to their changing environment and to reinvent themselves (storytelling).
More generally, I suggest that reification encompasses both concepts of doublespeak and
storytelling. Indeed, the first step of reification (objectification) makes the world neutral
(doublespeak). Furthermore, the third step of reification (preventing dispute) and the final
outcome of doublespeak/storytelling are alike: making the audience accept new clothes
for old things. However, while reification and doublespeak/storytelling present similarities,
they emphasise different aspects. Boje et al.’s concepts mainly focus on communication
games, while reification, as a critical Marxist concept, points to their detrimental social
consequences. I suggest that integrating the language aspects in the reification process, i.e.
connecting objectification and language games, could fruitfully add to the powerful critical
concept of reification.
Finally, and more specifically, this analysis has many common points with Froud et al.’s
(1996, 2000) deconstruction of recent New Labour’s and consultants’ discourses about
the ‘stakeholder economy’. As has been quoted above, Froud et al. gauge the gap be-
tween promises and realities and show how the ineluctable conflict between stakeholders
is masked, in order to maintain relationships of domination. This analysis corresponds to
the last three steps of reification, but does not do full justice to the objectification process
that significantly contributes to the masking of conflict. However, as will be developed be-
low, unveiling objectification and its negative role—the very specificity of the reification
concept—is of crucial importance.
4.3. Reification and the “governmental” role of accounting
Objectification has been extensively analysed by Miller and Rose (Miller, 1992, 2001;
Miller and Rose, 1990; Rose, 1988, 1991) as a core process of “technologies of government”,
i.e. “mechanisms through which programs of government are articulated and made operable”
(Miller, 2001, p. 379). Governing economic life, Miller and Rose argue, is not only a question
of political power, nor of language in the sense it is usually studied (discourses, rhetoric),
it is also, and largely, a matter of indirect mechanisms. Calculative practices, and among
them accounting ones, exemplify these mechanisms “through which authorities of various
sorts [seek] to shape, normalize, instrumentalize the conduct, thought, decisions and as-
pirations of others” (Miller and Rose, 1990, p. 8). These mechanisms make “the world”
visible, cognisable, calculable, comparable and manageable. The core process at stake is
that of objectification. For instance, discounted techniques for investment decision substi-
tute objectivity and neutrality for former subjectivity and intuition (Miller and Rose, 1990);
psychological techniques, which inscribe “human individuality”, objectify their subjects
(Rose, 1988, p. 187). Calculative practices are “technologies of government”, Miller and
Rose explain, mostly because they enable to “translate the objectives and values of others
into [one’s] own terms, to the extent that the arguments of another become consonant with
and provide norms for [one’s] own ambitions and actions” (Miller and Rose, 1990, p. 10).
In other words, accounting is a technology of government because it is linked to the at-
tempts by various actors to promote themselves and serve their own interests. This general
framework has recently been used to explain the degree of success of the implementation
of customer-focused indicators in firms. Thus, although there is no “sovereign customer”
(i.e. likely to choose its supplier) in the privatised water industry in the United Kingdom,
customer-focused performance measures were used to inscribe the importance of “serving
customer needs” into the activities of managers who had interests convergent with this evo-
lution (Ogden, 1997). Conversely when the same customer-focused indicators undermine
the power of some actors, they fail to govern action and change corporate culture (Vaivio,
1999).
There are some common points between Miller and Rose’s works and the present analysis
based on the reification framework. On the one hand, Miller and Rose’s focus on calculative
instrumentation and its objectification role can be recognised as the first step of the reification
process. The instrumentation of “value” which has been described in the second section
of this text could be analysed as well as a “technology of government”. On the other
hand, the outcome of objectification (the government of actors) can be considered close
to what was referred to above as “the maintenance of social order”, i.e. the fourth step of
reification. Both formulations are about relations of domination and authority in the social
sphere.
However, the way the reification framework and Miller and Rose’s framework go from
the first step to the fourth is very different. Miller and Rose mainly appeal to the con-
vergence of authorities’ and actors’ interests, while the reification model emphasises the
masking of conflict and legitimisation processes. It is true that Rose mentions that num-
bers “are intrinsic to the forms of justification that give legitimacy to political power in
democracy” (Rose, 1991, p. 675) and that “the discretion inevitably exercised [by the re-
sponsible technicians and officials] is dissimulated by the claim that their expertise (. . . ) is
‘merely technical’ ” [original emphasis] (ibid., p. 680). But the core of the “governmental”
framework is about representation, not social conflict. Although representations and con-
vergent interests can certainly explain actors’ behaviours to a certain extent, I think that
there are more than these explanations in understanding social government. Hidden repre-
sentations are probably as powerful as visible ones and calculative practices are maybe
not the most relevant places to trace them back. Indeed, another (and consistent) dif-
ference between both frameworks lies in the mechanisms of government studied: Miller
and Rose focus on instrumented language, while the analysis above examines both types
of language—instruments and discourses. It shows how accounting instrumentation and
words, metaphors, discourses and silences reinforce each other to “govern” economic
life.
Finally, this analysis leads to a re-examination of the irenic view of Munro and Hatherly
(1993) that “new” strategies could represent an opportunity for a release of surveillance in
organisations. A decade ago, these authors suggested that (i) the fact that production was
no longer viewed as a zero sum game, (ii) the importance of time and flexibility in new
strategies and (iii) the consistent development of non-financial performance measures and
need for co-ordination, opened a space for potential change in the traditional assumption
that there is an ineluctable conflict between owners’, consumers’ and employees’ interests.
Munro and Hatherly considered these conflicts to have been overstated (ibid., p. 381) and
proposed that the concept of “affiliation” could be used to rethink relationships between
stakeholders and conditions for mutual benefits. They viewed the need for lateral commu-
nication and the development of non-financial performance measures as opportunities for
a dismantling of traditional hierarchical surveillance, although they were also quite con-
scious that such a “lateral” evolution could also be subverted into an increase of surveillance.
Ten years later, the present analysis suggests that the conflict between stakeholders is still
alive and strong. Other studies have analysed the development of non-financial indicators
and the new directions of management accounting as a supplement of control and surveil-
lance (Bourguignon, 2003). In France surveys regularly conducted by the Ministry of Work
[DARES 1984, 1991, 1998] show that “all employees are increasingly obliged in the course
of their duties to meet deadlines, respect production norms or consider customers’ needs.
And the new margins of initiative left to employees have done little to decrease hierarchical
control” (Hamon-Cholet and Rougerie, 2000, p. 243).
4.4. Academic and practical perspectives
We have seen above that the various steps of reification have been acknowledged in ac-
counting research, with however an unbalanced emphasis on either representation/
objectification or conflict/legitimisation according to analyses. In management studies,
where ‘reification’ is also not infrequently mentioned, the same unequal attention is paid to
its different steps. For instance, Rousseau and House (1994, p. 25) and McKinley et al. (2000,
p. 233) argue that respectively, organisational units of study and sociocognitive schemas
regarding downsizing are commonly “reified”. However, these texts do not refer to the
original definition of reification, resulting in the disregard of some steps of the whole
process. Thus Rousseau and House (1994, p. 25) emphasise that reification brings justi-
fication (third step), and McKinley et al. (2000, p. 237) underline the “inevitability” of
downsizing (third step also), but both texts hardly mention the other elements of reification
(objectification and maintenance of social order). Coming back to the original concept of
reification makes it possible to pay a balanced attention to its various aspects and their inter-
locking.
Why is a balanced and interlocked analysis of reification so crucially important? I will
successively examine research and practice perspectives, and in each of them, present some
general considerations before focusing on the case of value creation.
Regarding research in general, Berger and Luckmann have underlined that “the analysis
of reification is important because it serves as a standing corrective to the reifying propensi-
ties of theoretical thought in general and sociological thought in particular. It is particularly
important for the sociology of knowledge, because it prevents it from falling into an undi-
alectical conception of the relationship between what men do and what they think” (Berger
and Luckmann, 1967, p. 91). In other words reification explains how human beings forget
that they have created their own world. Therefore the analysis of reification enables the
restoration of the consciousness of the construction of reality and the dialectical relation-
ship before reality and its creators. Besides, if we admit that “(. . . ) as soon as an objective
social world is established, the possibility of reification is never far away” (Berger and
Luckmann, 1967, p. 89), it would be of interest to investigate the conditions under which
objectivity turns into objectification, and further reification, and the influence of the context
on its detrimental effects.
About VC more specifically, the analysis of its reification opens up new research agen-
das. Firstly, it leads to broaden the scope of research, which, as of today, mostly proceeds
from a strategic and managerialist perspective (objectives, systems, conditions of imple-
mentation, effects, etc.). The analysis of reification shows how a social perspective could
be fruitful. Placing those managed—instead of managers—at the core of research ques-
tions and investigating freely their perceptions and reactions to VC would certainly tell
us wholly different stories than the usual strategic dream one. Additionally, it would be
of interest to study whether the hierarchical position, the job orientation (administrative,
technical, commercial), or other individual and environmental characteristics influence the
way in which persons make sense of VC. Finally, although this is a very difficult matter,
it would be relevant to gauge the social costs of value creation (absenteeism, effects of
stress on quality, productivity, health, etc.) in places which have implemented value-based
management practices.
Regarding practices, generally speaking, the analysis of reification is vitally important,

because in most organisations, objectivity is generally accepted as a valuable quality of
things: for instance, so-called “biases” are systematically sought out in performance mea-
surement, personnel appraisal or decision making. If, as suggested above by Berger and
Luckmann, objectivity hardly escapes reification, the positive aspects of objectivity (fair-
ness of appraisal for instance) mask the detrimental consequences of reification. Unfolding
the dark side of objectification, i.e. reification, benefits the dominated social actors, who
are given arguments to oppose resistance to the process of their domination, from its early
stages.
This is all the more important as the detrimental effects of reification that have been
inventoried above intensify with time. Indeed, not only is reification directly detrimental to
society and some social categories, but it also undermines collective action in organisations.
As I shall illustrate in the next paragraph, reification undermines performance, motivation,
behavioural influence, and creates a serious risk of loss of relevance. These various failings
converge towards a gap in organisational performance, that is, given the structure of dom-
ination, an increased pressure on the “weak” stakeholders. There exists a vicious circle of
reification, with the same persons and institutions paying an escalating price.
I use the example of VC to illustrate how reification is detrimental to collective action in
organisations, although any other “reified” concept might produce similar effects. Firstly,
while the cost of the reification of VC is mostly individual and societal, as has been explained
above, there are some costs left to be paid by the organisation. Individual stress may impinge
on the relevance and accuracy of reaction and decision at work (Harvey, 1990, p. 306), and
further performance, whatever its definition (productivity, quality, etc.). Besides, firms often
disregard or underestimate the effects of downsizing on surviving persons, which in turn,
negatively impact their performance. Secondly, although participants do not always voice it,
they are not fooled by the way in which VC is made irrefutable. When uncovered, rhetoric
turns against the rhetorician and makes participants sceptic: were the concept really relevant,
would it need any embellishment and stage direction?16 Scepticism is all the more likely to
arise given that reified VC often appears as one of the last managerial fads, the succession
of which tends to generate scepticism towards new approaches and apathy. Thirdly, the
borderline between an all-embracing concept and an empty concept is very tenuous, so
that finally the plasticity of reified VC might very poorly influence behaviours towards
organisational goals. Fourthly and finally, because VC is unquestioned, there is a risk that,
once implemented, its instrumentation will not be debated. When management control
methods are not questioned and updated on a permanent basis, they face the risk of losing
relevance. Thus, the reification of VC creates a serious risk of loss of relevance of the
associated performance measures. Altogether, these various “lacks” are likely to contribute
to a performance gap, which provides a renewed basis for the reification of VC.
I would like to end this analysis with a view on the role of managers in the process
described. One aspect of the last step of the reification process is that social injustice has
become commonplace (Dejours, 1998). Dejours describes how managers “accept the ‘dirty
16 The same type of scepticism can be observed in some African countries, where the best way of discrediting
a product is to advertise it. According to common sense, good products do not require any help to be sold, and
hence only bad products need it.
job’ [original emphasis]” (p. 101) and tolerate, un-denounce and participate in impos-
ing suffering on others. In terms of reification, managers—who belong to the dominating
category—are the agents whose job it is precisely to implement social domination. Accord-
ing to Dejours, the “rationalisation of evil” (1998, p. 123) is a defensive strategy against
most managers’ feelings of shame, and it is made possible through (1) the fear of not being
recognised as courageous and virile, (2) “the defensive ideology of economic realism” (p.
128). I suggest that the objectification of VC (i.e. the first step of its reification) might be
one aspect of this ideology—a proposition not inconsistent with Dejours’ remark that this
ideology refers to the sense of “supra-individual interests [original emphasis]” (p. 128).
Moreover, Dejours’ analysis of managers’ defensive strategies to cope with the difficulty of
implementing domination suggests that one can simultaneously belong to the dominating
class, and be dominated and alienated. Thus domination might not be the dualistic and
closed process that it appears to be at first sight.
I share with Dejours the belief that “there is no short-term solution to the social mis-
fortune generated by economic liberalism in its present stage of historical development”
(1998, p. 23). However, this analysis of the reification of value creation might increase the
managers’ comprehension of the process of their own and others’ alienation, and develop a
consciousness of their central role in the process. There is no fatality in managers’ silence
and complicity. Managers are key actors in the reproduction of capitalism. They could also
be key actors in its long-term change.
Acknowledgements
I would like to thank Eve Chiapello, David Cooper, René Demeestère, Michel Fiol, Alan
Jenkins, Michel Lebas, Gérald Naro, Hanne Nørreklit, Philippe Zarlowski, both reviewers
and the participants of a doctoral seminar at HEC School of Management (France) for their
helpful comments on former versions of this text. Thanks also to Julie Burness for her
editorial help. This article is dedicated to the memory of Franck Michaux, who made a vital
contribution to this analysis.
References
Albouy, M. Décisions ‘financières et création de valeur. Paris: Economica; 2000.

Allen D. Costs, values and prices. Manage Acc (UK) 1996;74(4):32.
Aristotle. Rhétorique. Paris: Gallimard; 1998.
Berger P, Luckmann T. The social construction of reality. New York: Anchor Books; 1967 [original edition: New
York: Doubleday Dell Publishing Group; 1966].
Berry RH. Shareholder value management and the human resource management function. Communication pre-
sented at the Management Control Research Seminar. ESSEC Business School, Cergy-Pontoise, France; 2000.
Bessire D. De la création de valeur à sa répartition. L’Expansion Manage Rev 1999;(94):101–6.
Boje DM, Rosile GA, Dennehy R, Summers DJ. Restorying reengineering. Some deconstructions and post-modern
alternatives. Commun Res 1997;24(6):631–68.
Boltanski L, Chiapello E. Le nouvel esprit du capitalisme. Paris: Gallimard; 1999.
Booth R. Appreciating the value before counting the cost. Manage Acc (UK) 1997;75(1):54.
Bourguignon A. Conformité-autonomie: la double contrainte du “nouveau” contrôle de gestion? In: Perret V,

Josserand E, editors. Le paradoxe: penser et gérer autrement les organisations. Paris: Ellipses; 2003. p. 191–221.
Bourguignon A, Malleret V, Nørreklit H. Balanced scorecard versus French tableau de bord: beyond dispute, a
cultural and ideological perspective. ESSEC Research Centre Working Papers, No. 01005, Cergy-Pontoise,
France; 2001.
Boyce G. Valuing customers and loyalty: the rhetoric of customer focus versus the reality of alienation and
exclusion of (devalued) customers. Crit Perspect Acc 2000;11:649–89.
Brémond J, Geledan A. Dictionnaire économique et social. Paris: Hatier; 1981.
Brockner J, Greenberg J, Brockner A, Bortz J, Davy J, Carter C. Layoffs, equity theory, and work performance:
further evidence of the impact of survivor guilt. Acad Manage J 1986;29(2):373–84.
Bromwich M, Walker M. Residual income past and future. Manage Acc Res 1998;9:391–419.
Chanlat JF. Nouveaux modes de gestion, stress professionnel et santé au travail. In: Brunstein I, editor. L’homme
à l’échine pliée. Paris: Desclée de Brouwer; 1999. p. 29–61.
Charreaux G, Desbrières P. Gouvernance des entreprises: valeur partenariale contre valeur actionnariale. Finance
Contrôle Stratégie 1998;1(2):57–88.
Chiapello E. Reconciling the two principal meanings of the notion of ideology: the example of the concept of the
‘spirit of capitalism’. Eur J Social Theory 2003;6(2):155–71.
Comte-Sponville A. Valeur et vérité. Etudes cyniques. Paris: PUF; 1994.
Cooper R, Kaplan RS, Maisel LS, Morrissey E, Oehm, RM. Implementing activity-based cost management:
moving from analysis to action. Montvale, NJ: Institute of Management Accountants; 1992.
Cormier D, Magnan M. Investors’ assessment of implicit environmental liabilities: an empirical investigation. J
Acc Public Policy 1997;16(2):215–41.
Dejours C. Souffrance en France. Paris: Seuil; 1998.
Dejours C. Le facteur humain, 2nd ed. Paris: Presses Universitaires de France; 1999.
Dictionnaire Trésor de la Langue Française. Paris: Gallimard-CNRS; 1988.
DiMaggio PJ, Powell WW. The iron cage revisited: institutional isomorphism and collective rationality in organi-
zational fields. Amer Soc Rev 1983;48:147–60.
Dubouloy M, Fabre C. Les conséquences psychologiques et sociales des stratégies de restructuration. Communi-
cation presented at the 10e Congrès de l’Institut Psychanalyse et Management, Conflits Sociaux et Conflits
Intra-Psychiques, Groupe HEC, Paris; June 2000.
Edvinsson L, Malone T. Intellectual capital. Realizing your company’s true value by finding its hidden brainpower.
New York: HarperCollins Publishers; 1997.
Ehrbar A. EVA. Les défis de la création de valeur. Paris: Editions Village Mondial; 2000 [original edition: EVA:
the real key to creating value. New York: Wiley; 1998].
Francis G, Minchington C. Value-based management in practice. Manage Acc UK 2000;78(2):46–7.
Froud J, Haslam C, Johal S, Shaoul J, Williams K. Stakeholder economy? From utility privatisation to New Labour.
Capital and Class 1996;60:119–34.
Froud J, Haslam C, Johal S, Williams K. Shareholder value and financialization: consultancy promises, manage-
ment moves. Econ Soc 2000;29(1):80–110.
Gehrke I, Horváth P. Implementation of performance measurement: a comparative study of French and German
organizations. In: Epstein MJ, Manzoni JF, editors. Performance measurement and management control: a
compendium of research. London: JAI Press; 2002. p. 159–80.
Hamon-Cholet S, Rougerie C. La charge mentale au travail: des enjeux complexes pour les salariés. Econ Statist
2000;(339/340):243–55.
Harvey D. The condition of postmodernity. Cambridge, MA: Blackwell; 1990.
Ittner CD, Larcker DF. Innovations in performance measurement: trends and research implications. J Manage Acc
Res 1998;10:205–37.
Kaplan RS, Norton DP. The balanced scorecard—measures that drive performance. Harvard Bus Rev
1992;70(1):71–9.
Kaplan RS, Norton DP. The balanced scorecard. Boston, MA: Harvard Business School Press; 1996.
Kaplan RS, Norton DP. The strategy-focused organization. Boston, MA: Harvard Business School Press; 2001a.
Kaplan RS, Norton DP. Transforming the balanced scorecard from performance measurement to strategic man-
agement: Part II. Acc Horizons 2001b;15(2):147–60.
Lalande A. Vocabulaire technique et critique de la philosophie, vol. 2. Paris: Quadrige/PUF; 1992.
Landry M. L’ambiguı̈té comme outil de gestion. Revue Française de Gestion 1995;(105):110–26.

Lavelle L. Traité des valeurs. Vol. 1: Théorie générale de la valeur, 2nd ed. Paris: Presses Universitaires de France;
1991.
Le Moigne JL. Les épistémologies constructivistes. Paris: Presses Universitaires de France; 1995.
Levitt T. The marketing mode. New York: McGraw-Hill; 1969.
Lorino P. Méthodes et pratiques de la performance. Le guide du pilotage. Paris: Editions d’Organisation; 1997.
Lukács G. Histoire et conscience de classe. Paris: Editions de Minuit; 1959 [original edition: Geschichte und
klassenbewusstsein. Berlin: Malik-Verlag; 1923].
Malmi T, Ikäheimo S. The uses and benefits of value-based management: some case study evidence. Communi-
cation presented at the 23rd Annual Congress of the European Accounting Association, Munich, Germany,
29–31 March 2000.
Marion G. Les voeux du Président. Revue Française de Gestion 1993;(93):45–55.
Marx K. Le capital. Livre premier. Paris: Quadrige/Presses Universitaires de France; 1993.
McKinley W, Zhao J, Garrett Rust K. A sociocognitive interpretation of organizational downsizing. Acad Manage
Rev 2000;25(1):227–43.
McMillan KP. The science of accounts: bookkeeping rooted in the ideal of science. Acc Hist J 1998;25(2):1–33.
Miller P. Accounting and objectivity: the invention of calculating selves and calculable spaces. Ann Scholarship
1992;9(1/2):61–86.
Miller P. Governing by numbers: why calculative practices matter. Social Res 2001;68(2):379–96.
Miller P, O’Leary T. Making accountancy practical. Acc Org Soc 1990;5(5):479–500.
Miller P, Rose N. Governing economic life. Econ Soc 1990;19(1):1–31.
Monroe KB. Pricing. Making profitable decisions, 2nd ed. New York: McGraw-Hill; 1990.
Montefiore A. Valeur et évaluation. In: Encyclopedia universalis, vol. 16. Paris; 1973. p. 583–7.
Mottis N, Ponssard JP. Value-based management and the corporate profit centre. Eur Bus Forum 2001/02;(8):41–7.
Munro RJB, Hatherly DJ. Accountability and the new commercial agenda. Crit Perspect Acc 1993;4(4):369–95.
Nørreklit H. The balance on balanced scorecard—a critical analysis of some of its assumptions. Manage Acc Res
2000;11:65–88.
Nørreklit H. The balanced scorecard: what is the score? A rhetorical analysis of the balanced scorecard. Acc Org
Soc 2003;28(6):594–619.
Ogden SG. Accounting for organizational performance: the construction of the customer in the privatized water
industry. Acc Org Soc 1997;22(6):529–56.
Parker RH. Finding English words to talk about accounting concepts. Acc Audit Account J 1994;7(2):86–102.
Pascail L. Pour en finir avec la religion du zéro-défaut. Les vertus de la qualité idoine dans l’industrie du verre
d’emballage. Gérer et Comprendre 2000;(59):18–25.
Perilleux T. Les tensions de la flexibilité. Paris: Desclée de Brouwer; 2001.
Pierrat C, Martory B. La gestion de l’immatériel. Paris: Nathan; 1996.
Ponssard JP, Zarlowski P. Nouveaux indicateurs de création de valeur. Des outils satisfaisants pour l’évaluation
interne des activités de l’entreprise? Revue Française de Gestion 1999;(122):91–8.
Porter M. Competitive advantage. New York: Free Press; 1985.
Rappaport A. Creating shareholder value. The new standard for business performance. New York: Free Press;
1986.
Rose N. Calculable minds and manageable individuals. Hist Hum Sci 1988;1(2):179–200.
Rose N. Governing by numbers: figuring out democracy. Acc Org Soc 1991;16(7):673–92.
Rousseau DM, House RJ. Meso organizational behavior: avoiding three fundamental biases. In: Cooper CL,
Rousseau DM, editors. Trends in organizational behavior. New York: Wiley; 1994. p. 13–30.
Shank JK, Govindarajan V. La gestion stratégique des coûts. Paris: Editions d’Organisation; 1995 [original edition:
Strategic cost management. New York: Free Press; 1993].
Stern J, Stuart, G III , Chew D. The EVATM financial management system. J Appl Corporate Finance 1995;8(2):32–
46.
Stewart GB. The quest for value: the EVA management guide. New York: HarperCollins Publishers; 1991.
Tanaka M. Cost planning and control systems in the design phase of a new product. In: Monden Y, Sakurai M,
editors. Japanese management accounting: a world class approach to profit management. Cambridge, MA:
Productivity Press; 1989. p. 49–72.
Tinker AM, Merino BD, Neimark MD. The normative origins of positive theories: ideology and accounting
thought. Acc Org Soc 1982;7(2):167–200.
Town C. Project control and earned value management. Manage Acc (UK) 1998;76(8):22–4.
Vaivio J. Examining The Quantified Customer. Acc Org Soc 1999;24(8):689–715.
Wallace JS. Adopting residual income-based compensation plans: do you get what you pay for? J Acc Econ
1997;24:275–300.
Zarlowski P. De la modélisation économique au pilotage: une analyse critique des indicateurs de création de valeur.
Actes des XIVèmes Journées Nationales des IAE, tome 4. Nantes, France: Presses Académiques de l’Ouest;
1998. p. 361–74.
Zarlowski P. A comparative analysis of economic value measures. Communication presented at the 22nd Annual
Congress of the European Accounting Association, Bordeaux, France, 5–7 May 1999.
View publication stats

Functional Costing Deeproot Analysis

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Functional Costing Deeproot Analysis

Uploaded by

Copyright:

Available Formats

See discussions, stats, and author profiles for this publication at: https://www.researchgate.

Management accounting and value creation: The proﬁt and loss of

Article in Critical Perspectives on Accounting · May 2005

The user has requested enhancement of the downloaded file.

Management accounting and value creation:

foremost an accounting, but a strategic concept. Management accounting contributes to its

1.2. Argument and relevance

Furthermore, the central process of this analysis—reification—is likely to be applied to

1.3. Method and structure

2. The reification of value

2.1. The concept of reification

1. Reification is a process of replacement. It is about a shift from the world of human

2.2. The polysemy of value

2.2.1. Measurement value

5 See, for instance, Dictionnaire (1988, p. 900).

2.2.2. Economic value

2.2.3. Philosophical value

2.3. Value: an inherently reified concept

3. Value creation: a four-step process of reification

3.1. Value creation: customer and shareholder perspectives

3.1.1. Customer value

3.1.2. Shareholder value

3.2. The objectification of subjectivity

3.2.1. From the stakeholder’s subjectivity to external objectivity

Subjective value for the stakeholder (H)

Instrumental objective value for the firm (H)

Intrinsic objective value for the firm (H and B)

Fig. 1. The process of reification of value.

3.3. The concealed conflict of stakeholders

3.3.1. Many missing stakeholders

3.3.2. Do shareholder and customer values converge?

Market value = Financial capital + Intellectual capital

The IC approach, originally developed at Skandia,9 offers a model of components of

(Edvinsson and Malone, 1997, p. 53).

3.3.3. An unsound convergence of all stakeholders’ interests

an indirect association between process-related measures and customer value.

3.4. Towards irrefutability

3.4.1. Emotion-based persuasion

technical proofs are related to him-/herself or to his/her (rhetorical) method.

3.4.2. Persuasion through biased argumentation

3.4.2.2. Hyperbolic oppositions. I have mentioned earlier some examples of oppositions

and the same promises.

3.5. The maintenance of social order

3.5.1. The legitimisation of organisational order

3.5.2. The unequal distribution of value in society

4. Discussion and conclusion

4.1. Some unresolved complexities

4.2. Reification and managerial innovation

VC appears as a so-called managerial innovation. In this section, I discuss the contribution

4.3. Reification and the “governmental” role of accounting

4.4. Academic and practical perspectives

Regarding practices, generally speaking, the analysis of reification is vitally important,

Albouy, M. Décisions ‘financières et création de valeur. Paris: Economica; 2000.

Bourguignon A. Conformité-autonomie: la double contrainte du “nouveau” contrôle de gestion? In: Perret V,

Landry M. L’ambiguı̈té comme outil de gestion. Revue Française de Gestion 1995;(105):110–26.

View publication stats

You might also like