Means versus ends: a review of the literature on Japanese management accounting

As an introduction to the topic of Japanese management accounting, we provide here a review of the literature and an attempt to categorize what has been written previously on the subject. One obvious characteristic that emerged during this review is that Japanese management accounting is designed to operate in a 'Japanese setting', not a Western one. Much of the literature on Japanese methods recognizes some aspect of that setting when describing the techniques. During the review process, several related clusters of recurring practices surfaced. We have crystallized these clusters into five themes. They are: (1) examining work using the 'eyes' of the market; (2) focusing on the quality of work; (3) employing 'waste' as the measure of cost; (4) continually improving the way work is done, and (5) sharing knowledge through vertical and horizontal communication. It is our contention that the Japanese management accounting techniques described in the literature cannot be sensibly and effectively used in Western venues without an understanding of how the Japanese employ these particular management accounting techniques to pursue the multiple themes behind their use. © 1995 Academic Press. All rights reserved.