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Critical Discussion - Essay Example

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This change represents a historical shift from the Fordist methods in business to the post-Fordist methods and beyond. This paper will attempt to analyse the role played by management accounting in this historical shift by looking into both Fordism and post-Fordism while trying to realise how changing business requirements have been addressed by management accounting over time. 2. Fordism Fordism refers to an economic and social system that bases itself exclusively on the ideas of Henry Ford’s model of mass production. The use of Fordism is not restricted to the economic domain alone but instead it has been applied to social as well as socio-economic systems too (Thompson, 2005). The essential side of Fordism relies on the fact that goods are produced cheaply in such a fashion that the people producing those goods are able to consume them. This facet of Fordism has made it popular in some Marxist circles as well. However, it has to be realised that the economic and social circumstances that favoured Fordism are now effectively over leading to a shift in Fordism. Some commentators call this shift post-Fordism though other disagree and contend that Fordism has been under constant evolution instead. De Grazia (2005) has defined Fordism as "the eponymous manufacturing system designed to spew out standardized, low-cost goods and afford its workers decent enough wages to buy them". In contrast to Grazia’s view, other commentators have described Fordism as an economic model for economic expansion that relies on mass production in order to create large volumes of standardised products using unskilled labour and specialised manufacturing equipment (Tolliday & Zeitlin, 1987). When these views are put in perspective of the manufacturing carried out by Henry Ford’s automobile plant at the turn of the twentieth century it becomes clear that both definitions are incomplete and tend to complement each other to produce a working definition. Hence, Fordism (for the purpose of this paper) is an economic process that allows the creation of standardised goods using unskilled labour and specialised manufacturing equipment such that the workers themselves are able to afford these goods. It must be realised at this point that Marxism, socialism and allied ideologies are distinct to Fordism in that Fordism still relies on a free market economy in order to thrive. The Marxist and socialist doctrines require that the control of businesses be relinquished to the government while there are no such stipulations in Fordism. Fordism has tended to rely on three major operating principles through its initial use at Henry Ford’s automobile manufacturing plant and then for its use in social and economic pathways. The fundamental operating principles are (Tolliday & Zeitlin, 1987): all products are standardised so that handmade craftsmanship is not required and is instead production is dealt with by machines; manufacturing relies on the utilisation of specialised tools and equipment to make assembly lines a reality. This indicates that low level and unskilled workers are able to operate sophisticated manufacturing equipment in order to man assembly lines. Moreover, the nature of tasks performed on the assembly lines are monotonous and require little creative thinking; the workers working on these assembly lines are paid wages that are sufficient for them to purchase the things they produce. These basic tenets of ...Show more


“As organisations move from operating under Fordist conditions to operating under Post-Fordist conditions, the focus of management accounting must change. It must relate to products in different ways and other aspects, such as customers and competitors, must be addressed.” 1…
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