MANAGEMENT BY NUMBERS
Mojca MARC, PhD
School of Economics and Business, University of Ljubljana
Kardeljeva ploscad 17, 1000 Ljubljana
Historical accounts demonstrate that numbers developed because of accounting. Throughout history, the
tendency to quantify and monetize was constantly increasing. Nowadays, technology enables us more
quantifying and more monetizing than ever before. As a parallel to that, the scope of things we want to
measure and monetize increased as well. Based on works by Latour (1987) and Robson (1992) on
accounting inscriptions and inscription devices, Miller (2007) noted that any calculative practice
involves not just inscriptions (numbers), but the tools as well. Hence, the numbers are usually not taken
alone but are embedded in more or less complex analytical models. Simultaneously to the increased
complexity of data collected, ever more sophisticated calculative tools developed as well. The academic
and professional literature in accounting and finance typically contends that more advanced analytical
models should be preferred to heuristic approaches. Consequently, a management style granting
numbers the pivotal role in decision-making (also known as management by numbers) has spread as
numerical information became more available, and complex analytical models became the modern
However, individuals and organizations have different preferences to how numbers and analytical
models are used in managerial decision making. They have different needs regarding the amount as well
as the precision of numerical information required to make decisions. As shown by psychology
literature, subjective decision-making by individuals and small groups, like a board management team,
is influenced by cognitive simplifications and diverse preferences (Luft & Shields, 2009). Furthermore,
the same research strand shows that people simplify quantitative scientific models by incorporating in
their subjective decision-making only the signs of relations between variables and gross differences in
the magnitudes, but not the exact magnitudes (Luft & Shields, 2009). Shared activities, like e.g. board
meetings, provide an opportunity to develop a shared frame of interpretation that is relied on by group
members while processing numerical information (De Bondt, Mayoral, Vallelado, 2013; Vollmer et al.,
2009) used in decision-making. A shared scheme of numerical interpretation manifests a management
board team's calculative culture by showing the prevailing logic underlying the calculation and number
interpretation performed by the board members (Marc & Peljhan, 2019; Mikes, 2009; Power, 2007). It
is believed that a shared calculative culture leads to more effective teamwork and better decision-making
from the group's perspective, ultimately also influencing organizational performance.
Alas, despite the remarkable technological advancement in collecting and analysing quantitative data,
management's top problems remain the same: how to execute the numerically carefully elaborated
plans? In light of this, the danger lies in the overload of numerical information, and as ever, the challenge
is still to pick the important ones to steer a business. Hence, the main challenge posed for the future is
not how to collect and analyse more numbers, but what to do with them. Can technologies such as
machine learning and artificial intelligence lead us to a more holistic analytical approach? And how will
this redefine the role of accounting and accountants?
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overview and assessment of selected research. Spanish Journal of Finance and Accounting, 42(157),
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Keynes: Open University Press.
Luft, J., & Shields, M. D. (2009). Psychology Models of Management Accounting. Foundation and
Trends in Accounting, 4(3-4), 199–345.
Marc, M, & Peljhan, D. (2019). Calculative Culture in Management Control Systems: Scale and
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