MANAGEMENT ACCOUNTING

Management Accounting

Management Accounting

Introduction

This paper investigates strategic management accounting in an organisational setting. Its motivation is to get an in-depth comprehending of strategic management accounting (SMA) as it is dwelled and seen by actors in organisations. The paper aspires to assist to this emergent comprehending by supplying insights from a multinational business in Germany. SMA can amply be characterised as being the use of management accounting schemes in carrying strategic decision-making. The survival of businesses in today's highly comparable international markets may count partially on a management accounting function that permits for the thriving evaluation of strategic situations. SMA can supply such a function.

 

Discussion

Recent years have glimpsed a large deal of interest in SMA in the learned community. This interest was distinuished by an primary focus on normative study which has been pursued by more empirical research. Major normative assistance to SMA often propose templates for SMA practices for example competitor accounting and comparable place supervising and contemporary accounting expansion with a strategic constituent for example activity-based costing and the balanced scorecard.

Although this normative work has made a assistance to SMA it does bear from one grave drawback in that it is often disconnected from what really occurs in organisations. A number of reviews of SMA perform have been conveyed out (Simons 1987). These reviews have discovered that competitor accounting and strategic charge are the most broadly utilised methods but some furthermore propose that the period SMA is not broadly utilised in businesses, and its significance is not habitually clear to managers.

Other investigators have utilised a contingency idea approach to revising SMA practice.

Again, this study has assisted to our comprehending of SMA but does bear from the common drawbacks of contingency idea in that variable assortment and specification have been eclectic, experiment assortment not habitually comprehensive and some inconsistent outcomes have been produced. More significantly possibly these investigations hurl little lightweight on how SMA practices are applied and utilised in perform and supply no theoretical interpretation of such practices.

A number of case investigations of SMA have been conveyed out which do supply some interesting insights into SMA practices. Rickwood et al. (1990) findings propose that the accounting function accumulates, both regularly and expressly, facts and numbers in relative to the external natural environment of the company's procedures, encompassing data on competitors' presentation and plans.

Dent (1990) contends powerfully for interpretive study of the interface between accounting and strategy. Similarly Dermer (1990) advances the topic of accounting and strategy from an environmental viewpoint, which outlooks strategy as the conclusion of organisational struggle. Ahrens (1997) presents an interpretive study which investigates the strategic interventions of management accountants. He investigates ethnographic material from a set of British and German brewers, in alignment to discover how management accountants in the two nations conceive of their connection with methods of strategic formulation and how they search to activate strategic arguments. Jarvenpaa (1998) presents an interesting account of management accounting and strategy in a Finnish high-tech ...