CONCEPT OR
  ASSUMPTION

          TRADITIONAL 
         MANAGEMENT 
  ACCOUNTING THEORY

 MODERN 
 ORGANIZATIONAL 
THEORY

Objective of organization:

Maximize profit. Assumes that sub-goals are divisible and additive (responsibility accounting).

The dominant members have goals, the organization cannot. Survival of the dominant members is the main goal and satisficing* is second. Sub-goals are not divisible and additive and may conflict.

Human behavior:

Lazy man theory X.
Motivation is economic need.
(See the McGregor summary).

Motivation factors include psychological, social and economic factors. Mixed theory X and Y.

Management behavior:

Must control employees with close supervision to maximize profits.

Make decisions to balance the contributions from participants with organizational inducements. Control through assigning and obtaining acceptance of authority.

Management accounting:

Used to aid in maximizing profit with emphasis on bureaucratic control, but accounting is neutral.

Used to provide information for planning and controlling to balance contributions.