DISSERTATION PROPOSAL

Dissertation Proposal

Table of Contents

Table of Contents2

Chapter I3

Introduction3

Background of the study4

Purpose of study4

Specific Objectives of Study4

Chapter II6

Review of the three projects6

Internal uncertainties and the unifying role of the profitability goal8

External uncertainty and the twin MAS modes9

Dimensions of uncertainty9

Chapter III11

Methods11

Primary Data collection methods12

Questionnaires12

Design of postal questionnaires13

Theme and covering letter13

Secondary Data Collection13

Chapter I

Introduction

At the heart of many Management Accounting (MA) practices there is a potential mismatch between the assumption of a materially predictable future operating environment and the reality of an uncertain, unpredictable world (Baxter, 2006, 42). The central role of MA is concerned with 'providing the information and control mechanisms needed to achieve organisational objectives' (Ittner and Larcker, 2001). The information element is provided by using techniques, such as product costing, customer profitability analysis and investment appraisal, to assess and plan management actions to meet organisational goals, normally defined in terms of profitability. The control element is provided by using techniques, such as budgeting, to develop targets and internal financial reporting to give feedback of variances of actual versus targets, and thus initiate remedial actions to be implemented where there are adverse variances (Barrett, 2003).

The overall process is therefore dependant on plans and targets being realistically achievable; however, this requires that the assumptions made about the future operating environment are materially accurate, and therefore that the future is relatively predictable and certain (Baxter, 2006, 42). Yet, while these core practices of MA are based on assumptions of future stability and certainty, the future is not stable and certain (Barrett, 2003). Organisations and operating environments are in a constant state of flux. New customers may or may not be won; existing customers may be lost or change either their volume or service requirements; suppliers also change their services and prices; operating environments change under the impact of new competitors, changing technology and the impact of national and global economic conditions. Consequently, the future is not predictable and stable, but generally uncertain. How therefore can MA, based on assumed future predictability and stability, be used to control and inform actions so that they meet organisational objectives, when the future on which the plans and targets are based is uncertain and in a state of flux? The importance of this issue has been recognised in a variety of differing contexts by a range of studies, but there have been few proposals on how the issue should be resolved.

Background of the study

The synoptic document therefore views the three projects as an integrated whole. The intention is to use the benefit of this reflective overview to draw out findings and conclusions which are of greater significance to theory and practice than achieved by the more localised findings of each of the projects. This has led to a reassessment and reinterpretation of some of the earlier assessments and conclusions made during the three projects. Where this has occurred these reinterpretations are specifically acknowledged and explained.

Purpose of study

Purpose of the study is to find out the relationship between management ccounting, profitability and operations in an uncertain ...