Why Management Accounting Innovation Is One of the Core Themes Driving Modern Organizations - Assignment Example

Assessment Students Name Institution Supervisors Name Date 1. Why Management Accounting Innovation is one of the core themes driving modern organizations. Managerial accounting innovation is an important aspect of any business; this is because it provides executives with information that is designed to support and enhance decision making process in organisations[Ray12]. This is important when organisations fight fierce competition that comes with new management techniques for the manager. Managerial accounting thus serves the purpose of transforming data into information that can be used to convey the meaning or use the same message in making important decisions for the company. Effective managerial accounting will thus provide quality and high profile information to the relevant persons at the right time[Car141]. 2. How the role of a Management Accountant has been adequate in driving innovation? Managerial accounting is the most vital part in the management innovation and control processes which define the organization’s objectives, it measures the organization’s progress and rewards or punishments for those who under performs in the organisation. This means that managerial accounting is meant to respond to the existing and growing changes in the business world[Dav05]. And if they fail to do this, it will negatively impact on the performance of the organisation. The managerial accounting aspect will thus introduce discipline in all arms of the firm, actions and reactions with regard to the events that organisations are engaged in. the changes in managerial accounting information will also include the productive and the unproductive elements of the system as well[RMW08]. This is capable of changing the management actions in a way that will be able to create a positive or negative decision with regard to the information contained in the data collected. 3. It is true that Role involvement will affect innovativeness in terms of: (i) knowledge about the appropriateness of innovations; In order to successfully innovate, Emsley (2005) suggests that the management accountant should be aware of an innovation as well as be in a position to understand the appropriateness of this innovation to the business manager. It is most likely that a management accountant with a business unit orientation will have the knowledge of the right kind of innovation to use due to the fact that they are always working hand in hand with the business unit manager[All13]. Knowledge and appropriateness of innovation is usually characterised as being technical or administrative, however when we look at managerial accounting per se, it is purely radical and very administrative. However, most innovations will involve technical and administrative elements and their implementation especially with regard to some of the innovation necessities[Der06]. This calls for the adoption of other technical and administrative innovations. With this regard the appropriateness of innovations will be viewed with the impact that it will have in being a global package with regard to a number of administrative and technical components In addition, having knowledge about the appropriateness of innovation will also result in to the long run implementation of the innovation after it has been put to use. Emsley (2005), adds that successful organisational plan around innovation will require that the organisation takes control of the innovation process. And even though a lot of organisations have failed to transparently define the innovation process, Emsley (2005), suggests that innovation process should that which is composed of generation and mobilization of the main idea[Ano10]. There should also be screening and advocacy of this innovation, commercialization, experimentation, implementation and diffusion. Lastly, knowledge based innovation processes also calls for the willingness of the participants to workout their differences, tensions, concerns and outputs that are related to each stage of innovation. (ii) Acceptance of the innovations by business unit managers; Innovation is a very important aspect of the business unit manager, this is realised as the business unit manager measures and reports on the financial and non-financial information for the organisation. According the Emsley (2005), ‘knowledge about the appropriateness of a management accounting innovation is likely to be a necessary but insufficient step in to initiating innovations.’ This means that innovations that are initiated by the managerial accountant are usually more likely to be accepted by the organisation since the business unit managers perceived results of the innovation at hand. This is why it will call for the managers to play a much greater role in the acceleration of the innovation process. In this way, the business unit manager is linked with the ultimate activity that is aimed at achieving the organisation’s goal and objectives. His duty and responsibility thus is rested on his position and will at the end of the day contribute in the speedy achievement to the goals of the organisation[Hel14]. The actions that the business unit manager will take in the process are very sensitive in the operation of the business as they harmonize the various units in the organisation. Emsley (2005), adds that business unit managers act as the strategic partners who provide decision based financial and operation information with regard to that unit. In addition, it is the role of the business unit manager to manage his team in addition to having to report his relationships and responsibilities to the organisation’s general manager. The business unit manager is thus important in innovation due to the fact that he is obligated to plan and forecast, review and analyse various managerial issues that are met in the unit. (iii) Incentives to innovate. According to Emsley (2005) role involvement will affect the development of managerial accounting innovations through their incentives to innovate. Emsley (2005) adds incentives will involve the accountant’s rewards and future prospects; however this should also go had in and with job satisfaction. Rewards are usually the best tools to see the level of managerial accountants and their performances; it also enables the organisations to be able to make decisions about their rise in promotions, salary, penalties and demotions. Most of the time, incentives in the organisation will be determined by the management accountants boss, who will look at the accountant in terms of business unit orientation as to being the most likely business manager[Gar14]. For this reason, incentives in managerial accounting are aimed at ensuring the business unit manager drives the organisation in to achieving its goals. At this, Emsley (2005) adds that, the managerial accountant will be able to produce information which is directed towards achieving these goals. 4. How the Management Accountant/s can accelerate the innovation within an organization. The management accountant plays a very great role in accelerating innovation in the organisation. The managerial accountant will contribute to the continuous quality improvement activities of the organisation as they assist in the decision making that involves measuring of financial and non-financial aspects of the business that may include functions such as customer satisfaction. Managerial accountants also provide analytical skills, information management, communication planning and planning expertise so as to encompass the broader categories of information which is an integral component of total quality management. The managerial accountant is also very vital when driving the organisation towards stakeholder satisfaction and meeting the needs of these stakeholders as well. Managerial accountant is also very important in increasing knowledge in the organisation, this is important as it assists in ensuring a reduction in the risk that is associated with making important decisions in the organisation. The information that will be researched and presented by the manager will be good enough to enable to organisation plan and control its operations with informed consent. In decision making, the managerial accountant is very useful since any decision that is made will be concerned with the selection of the action which in most case, will be decided upon after looking at several alternatives[Jaa13]. In order for the organisation to come up with the right decision, decision makers will need so form of guidance that is partially provided by the information which is gathered by the management accountant and his business unit managers as well. Managerial accountant will also look at tools such as activity based budgeting, costing, cost volume profit analysis etc. as being very helpful in supporting these decisions[Dav05]. It is recommended that all businesses in the modern world employs a managerial accounting unit in the organisation, this will assist the organisation in also creating transparency and clear decision making without prejudice. Managerial accountants are also important when it comes to decisions on performance based incentives, employee appraisals, promotions and turnover[Ray12]. They will recommend the need to expand the organisation or reduce the organisation capacity in order to control the financial year. When it comes to strategic planning of the organisation, managerial accountants play a very vital role, this is because they have been able to look at challenges facing the organisation and are able to decide on goals and objective for the coming financial year. When managerial accounting is implemented well in the organisations, it becomes very easy for the organisation to achieve its mission and vision. In addition, business units are able to coordinate well in the organisation and the organisation is also able to meet the needs of its customers and that of the stakeholders. A managerial accountant should in fact be considered as being one of the most important arm of the organisation since it acts as the overseer and decision maker for the organisations most important decisions. Sources Ray12: , (Proctor, 2012), Car141: , (S.Warren, Reeve, & Duchac, 2014), Dav05: , (Emsley, 2005), RMW08: , (Wilson & Chua, 2008), All13: , (Debrin & Bierman, 2013), Der06: , (Browne & Browne, 2006), Ano10: , (Anonymous, 2010), Hel14: , (Anheier, 2014), Gar14: , (Armstrong & Kotler, 2014), Jaa13: , (Boonstra, 2013), Read More