Management Accounting and Human Resources Related Functions - Essay Example

Accounting Research THESIS MENT This paper intends to discuss about a particular area of fairness related to the management accounting concept. It further aims to elaborate about how this area delivers significant benefits to the managers and the organizations as a whole. Moreover, the paper will also entail the affiliation between job costing and fairness. Q1. Management accounting along with various human resources (HR) related functions assists in creating performance evaluation report of the managers on the basis of fairness and most vitally mitigating uncertain situations. Fairness frames a vital part in developing the management accounting strategies of the organizations. Considering fairness as an integral part of management accounting, it is basically divided into two forms that include formal and informal fairness. In this regard, formal fairness takes into concern the design of management accounting system. Furthermore, it basically frames an effective structure for the managers who require setting up their predetermined goals along with budgets. It can be affirmed that the notion of formal fairness monitors the performances of the managers and delivers rewards accordingly (Matlala1-82). Conversely, informal fairness mainly entails the process through which the managers apply to execute the management accounting system. Fairness, as a valuable area of management frames various contributing factors that assist in ascertaining effectiveness of diverse organizations. According to various observations, it can be analyzed that fairness is basically taken into concern as the perception related to organizational justice. This particular area of management accounting research i.e. fairness is quite interesting owing to the reason that justice along with fairness depicts proper functioning of organizational activities at large. According to recent observations, fairness is associated with the facet of controllability, which is mainly considered as an objective. It has been viewed that depending on the reports related to distribution of awards and performance, incentives are equally distributed amidst the employees. Furthermore, fairness can also be achieved by considering the equal pay and awards amidst the employees. In this context, a relationship can be formed between fair judgment and equity. By providing fair treatment to the employees, the management ensures optimum concentration of the employees. Furthermore, on receiving equal payment and awards, retention rate of the employees accelerates towards the accomplishment of organizational goals (Matlala1-82). Q2. Managers play an imperative role in effective execution of organizational activities. Maintenance of fairness amidst the employees upgrades the work activities and fosters development of the organizations. Considering the mindset of the employees, prevalence of fair treatment brings in parity between their goals to that of the organizational objectives. Moreover, fairness, as the area of management accounting research also ensures to mitigate inter conflicts and any adverse situation prevailing within a particular organization. By fostering fair treatment, the managers are able to handle the interests of the stakeholders and build trust within them, ensuring higher investments. By practicing fairness within the organizations, managers can derive accurate information for adopting effective managerial decisions. Awards and pay, according to the performance standards of the employees will eventually accelerate their retention level at large (Scott 1- 17). In order to determine the ways through which the area i.e. fairness could benefit managers, it can be affirmed that transparency within the work activities of the mangers impose considerable impact on the performance level of the workers. Furthermore, transparency strategies also make active engagement of employees in diversified fields of organizational operations. Justice along with pay is mainly related with the concept of pay fairness. It can be viewed that rewards, as a part of fairness strongly relates with the attitude, performance along with the behavior of the employees (Scott 1-17). Sustainability of an organization also largely depends upon transparency, which is maintained within the activities that perform by the employees. Furthermore, it has also been ascertained that in the midst of globalization, fair division of the awards became a great challenge for the management. Fairness is not only limited to the employees of an organization, but it also extends up to the interest level of the stakeholders. Correspondingly, observations also revealed that managers tend to receive employee’s grievances related to fairness concern. Generally, the employees convey their concern related to unfair treatment in terms of the rewards received by them based on the evaluation of their performances. Considering globalization as the major concern, employees usually remain much concern about their pay, rewards and performances-based receivables with respect to the external standards (Scott 1-17). There exist certain determinants of fairness that acts in the area of management accounting research. Seniority or the tenure of employees’ stay within the organizations acts as a determinant of fairness pay. This assist the mangers to determine the basic pay and the rewards associated with elder employees of the organizations. The area of fairness could further assist the managers to calculate the pay associated with the allocated work responsibilities. Fairness, as an effectual area of management accounting research might help the managers to frame pay in accordance with individual potential and performance (Scott 1-17). Thus, it can be ascertained from the aforesaid discussion that it is necessary for managers to conduct fair treatment within their respective organizations in order to attain significant benefits Q3. With regard to determine about how fairness could benefit organizations, it can be duly considered that a fair process broadly influences the behavioral attitudes of the managers along with the employees related to accounting based organizational activities. It can be apparently observed that fairness develops a comprehensive framework for having a clear understanding about certain relevant factors that affect and influence the information acquired from any organizational activity. In relation to the notion of distributive justice, it is often considered that the employees must receive pay in accordance with their performances, impacting organizational development at large. In precise, development of the organizations is possible mainly on the terms of practicing fair treatment amidst the employees. In case of the idea concerning interactional justice, it mainly refers to individuals’ behaviors during an on-going process, which lay a greater impact on the rational outcome of organizational activities. The notion of interactional justice generally incorporates four major elements i.e. justification, propriety, respect and truthfulness that could benefit organizations in terms of developing their overall performance at large. Furthermore, in consideration with the notion of procedural justice, it has been ascertained that performance outcomes frame an important part concerning the fair pay of the employees. In this aspect, the idea reflects organizations’ strategies to maintain fairness amid the employees and also to foster growth along with development (Prasad, Martens, and Matthyssens 28-38). In the midst of globalization, wherein competiveness is at the peak level, attrition rate is growing in the modern business scenario. In this regard, practice of unfair treatment within the organizations might lead towards higher attrition rate, which will lay a greater impact on their overall performance of the organization. In this regard, equal treatment or the maintenance of fairness could benefit organizations in developing their overall performance and mostly vitally sustaining in this competitive landscape. Moreover, in order to utilize the available resources effectively, organizations would require active cooperation from its members, which is possible mainly on maintaining fairness amidst the employees. Furthermore, in order to maintain sustainability within the competitive market scenario, it is necessary to gain employees’ confidence and support. As it has been discussed above that managers often plays a decisive role in linking the gap between the organization’s sustainability and employees’ performances, it can be affirmed that the overall performance of the organizations mainly depends upon the conduct of various activities by the employees effectively and fulfilling their desired objectives. In this regard, it is the responsibility of the managers to effectively match up the objectives of the employees with that of the organizational goals. This can be made possible only when the organizations will entail fairness within their respective operational activities (Prasad, Martens, and Matthyssens28-38). Specially mentioning, employees often gets demotivated in terms of acquiring unfair treatment, which eventually hinders the development of the organizations by a certain degree. Ethical consideration forms the prior necessity for the organizations to sustain in this modern world (Prasad, Martens, and Matthyssens28-38). Thus, it can be ascertained that fairness could benefit the organizations as a whole by the conduct of the above discussed activities. Q4. Job costing mainly involves the cost of a single or multiple units related to a distinct product. In this context, the job particularly uses differentiated amount of resources for the process to get completed. Furthermore, it can be viewed that job cost mainly assists in tracking revenue information that are being incurred for completion of a given project. Powerful functionality related to job costing basically includes project estimating, material invoicing and billing (Horngren, Datar, and Foster 97-104). Concerning the job costing process, it basically involves seven steps for relatively assigning cost to the individual jobs being executed within a particular process. The process starts with the identification of the job which is going to be executed. Job cost records and job cost sheets are involved within this particular segment related to the process of job costing. Following this process, the next step includes the identification of direct costs being involved in a particular job. It can be affirmed that direct material along with direct labor frame the base of direct costs being involved in a job. Following steps reflect cost allocation on the basis of incurred indirect costs in the process. Correspondingly, the following step includes identification of indirect costs that are basically associated with the manufacturing process (Horngren, Datar, and Foster 97-104). Furthermore, the next step includes calculation of the rate per unit related to each allocation, which has been applied to determine the indirect costs within the process. Following this step, the next phase relates about the indirect costs that are associated with the ongoing job process. The last step includes total computation of the job by adding up the direct along with the indirect costs that are involved in a particular job process. In accordance with the aforesaid job costing process, it can be ascertained that fairness acts as a vital link-up in the entire job costing methodology. In consideration with the job cost records, unfair practice can be applied. Therefore, fairness requires to be maintained in order to derive proper records, as based on these records, the pay of the stakeholders depend at large. Furthermore, concerning the relationship between job costing and fairness, it can be affirmed that as job process involves direct labor, materials direct along with indirect costs, it becomes quite necessary for the management and the organization as a whole to foster fairness within the conduct of various operational activities. Otherwise, it might lead towards critical misrepresentation of records and reports, causing hindrance in organizational growth and also upon sustainability of the organizations in this competitive business market scenario (Horngren, Datar, and Foster 97-104). Q5. After reading the article of Sprinkle and Williamson (2006), the research question relating to management accounting can be framed as “Is it feasible that by implementing only the experimental accounting research, the entire managerial aspects can be determined?”. In consideration with the aforesaid question, it can be affirmed that being a vast topic, management accounting research entails job costing for the purpose of managing various sorts of adverse situations prevailing in manufacturing process. Economy frames an important part in determining the success of an organization. Moreover, economy also frames an important part in management accounting research. Economic basis mainly relates with the changes that generates new opportunities for conducting efficient researches on the concerned topic. The demand and supply notion related to market conditions broadly lays impact over management accounting research. It is worth mentioning that application based research provides better opportunity in gaining exact applicability of management accounting research in the modern day context. Furthermore, this particular research assists in gaining a better understanding about differentiated techniques that use by the modern business. With the gaining momentum of internationalization along with globalization, it can be ascertained that diversified culture and policy brings about greater changes in organizational context (Sprinkle and Williamson 419-448). In consideration with the article of Sprinkle and Williamson (2006), the above framed question can be regarded as quite interesting and/or relevant to accounting professionals. This might be owing to the reason that the response to the question might provide a brief idea to the professionals and/or the scholars about the conduct of experimental research for deriving better knowledge concerning the notion of management accounting. As per the article, it reflects about the importance of fairness, moral hazards or budget- based compensation. But in modern day context, in order to maintain sustainability within the competitive business market scenario, the question mainly exist whether is it feasible to apply sufficient fairness, ethical considerations or budget-based compensation in organizations or not. With the growing population, it can be viewed that market competition is accelerating, which is further making a way for the requirement of applying advanced technological advancement and planned strategies to compete in the market. In this regard, management accounting research involves costing, which is a vast area that requires in-depth analysis by the practitioners and the researchers (Sprinkle and Williamson 419-448). Works Cited Horngren, Charles T, Srikant M. Datar, and George Foster. Cost Accounting: A Managerial Emphasis. USA: Prentice Hall, 2006. Print. Matlala, Manoko Magdeline. “Employee Fairness Perceptions of a Performance Management System.” University Of South Africa (2011): 1-82. Print. Prasad, Bhaskar, Rudy Martens, and Paul Matthyssens. “Managerial Practices for Increasing Perceived Fairness in Inter organizational Projects.” The Open Management Journal 4 (2011): 28-38. Print. Sprinkle, Geoffrey B. and Michael G. Williamson. “Experimental Research in Managerial Accounting.” Handbook of Management Accounting Research (2006): 419-448. Print. Scott, Dow, “Reward Fairness.” A Report by World at Work (2011): 1-17. Print. Read More