Management Accounting Change - Assignment Example

Management Accounting Name Institution Date Question one What are the important issues that the authors (Tillman and Goddard 2008) are investigating in strategic management accounting? For the existence of any organization, strategies must be formulated and of more importance, strategies must be implemented (Alexandre et al., 2015).Competition is becoming paramount. In the modern business world, and strategy implementation should be carried out well to outfit the competitors’ strategies. The decisions made by the management regarding whether to invest in a new project, whether to acquire a new company, whether to buy or replace assets, are all pivoted on the information provided by the accountants, specifically management accountants (Tillmann & Goddard, 2008). The authors in the article are trying to pass out an understanding that management accounting is not a discipline that involves computation of figures all the time, but rather a discipline that draws some form of sense from the output of the computations. Figure will always be figures, but of great importance is what figures mean to the user (Alleyne & Weekes-Marshall, 2011). The users of accounting information vary from the shareholders themselves to the investor, both existing and potential. As noted in the article, information is key in sense making. In fact, for fruitful execution of sense making, information is key. Management accountants provide useful information by undertaking an analysis of the past data, present data and a possible projection of future data (Tillmann & Goddard, 2008). The authors are further stressing the fact that in as much as a management accountant is a professional accountant, for successful accomplishment of the aspect of sense making, the knowledge of other disciplines is important. The management accountant needs to understand something to do with marketing, production and how to deal with customers. Additionally, the authors are also passing out information regarding the process of decision making that management accountants play an important role in the process (Tillmann & Goddard, 2008). Decision making in an organizational setup is not a one man guitar, but rather involves a number of people (Hanim, Fadzil, & Rababah, 2012). Decision making involves implementing the sense out of the information, which makes it a sense making activity. It is important to acknowledge the fact that the work of management accountants does not end with computation of figures involving analysis of variances and cost estimation, but rather goes ahead to incorporate the element of making sense out of the available information for proper decision making. Information available for decision making can be found internally within the organization or can be obtained from the external environment. Whichever the source, proper analysis and scrutiny for sense is important. Remember, nor all information is valuable information (Hanim, Fadzil, & Rababah, 2012). Question Two Describe the role of prior literature in the author’s research.  Do you believe it has been adequate/not adequate for the study? What improvements you believe can be made The use of prior data in the research has been so much important in that is has shed some light on the extent to which the prior researchers went in relation to the subject matter, which is SMA. There was little that was done previously by the prior researchers so the need to focus on the matter, specifically sense making which SMA did not touch on (Tillmann & Goddard, 2008). Of importance to the researcher is the role prior research played in his work. Besides, prior literature enabled the researcher to comprehend the fact that a misconception was made to conclude that SMA is the same as sense-making, which happens to be his area of interest. Further, the use of prior literature enable the researcher realize that using the approach of competitor accounting or undertaking activity-based costing is not important in explaining the element of sense making because the approaches underpin the element of sense making in management accounting (Heidmann, Strahringer, & Schäffer, 2008). The use of prior research further helps the researcher understand that prior approaches adopted to understand SMA were not critical in explaining the element of sense making in organization. The approaches further did not show how SMA is used or implemented in modern organizations. However, it sheds light on the concept of SMA. The researcher was so interested about sense making in SMA and to aid in the successful accomplishment of his research, the use of prior literature was important to guide on areas that the previous approaches never touched. Therefore, the use of prior literature enabled the researcher to establish the gap in those literatures (Tillmann & Goddard, 2008). I strongly belief the literature has been adequate for the study since it revealed areas of weaknesses that those literatures never touched on. Similarly, the literature has been instrumental in the study as not much research had been done in the past regarding the subject of interest to the researcher, which is sense-making (Tillmann & Goddard, 2008). However, for improvement, i would recommend the use of marketing and production literature. This is so because for successful use of sense making, organizations’ management and management accountants need to have an understanding on production and marketing highlights. Similarly, more literature should be derived from Financial Accounting as a discipline since management accounting and Financial Accounting are interrelated. This provides a more in-depth understanding on the matter (Tillmann & Goddard, 2008). Question Three To answer their research questions the authors adopted a case study approach.  Do you agree with their approach (Yes/No) .What improvements you believe can be made. Administration concentrates on and hierarchical hypothesis depend intensely upon the use of case study as a type of information gathering or collection and even as a kind of unstructured examination. As a type of exploration, the case study is relevant for its capacity to consider a solitary or complex exploration question inside an environment full of contextual or relevant variables (Rogério et al., 2013). Observations, tests, studies and secondary information have the benefit of creating sets of dependent and independent variables reasonable for quantitative examination. On the other hand, the use of case studies as a data collection tool is most appropriate in considering questions that seek to answer how and why, or when the specialist has little control over occasions. However, the use of case studies as a data collection tool has noteworthy restrictions, and misapplication can deliver off base or conflicting discoveries. The researcher resorting to using a case study as a tool for data collection in this case or research, is relevant on one hand and irrelevant on the other hand. First, this approach is specifically important or relevant is an instance where the researcher aims at seeking answers regarding why something happened and possibly how it happened. In this research, the researcher aims at finding out why organizations’ management accountants need to make sense out of available information both internally and externally, and how the whole process is done. Secondly, it is relevant because the approach allows the researcher to analyze both qualitative and quantitative data (Tillmann & Goddard, 2008). On the other hand, I feel this approach is irrelevant because the researcher’s findings are likely to be subjected to some degree of biasness. Further, the use of case study does not provide room for scientific generalizations because a single case or subject is used therefore questioning the ability to make generalizations from a single case (Tillmann & Goddard, 2008). However, in as much as there are a number of limitations regarding the use of case studies, as an improvement, I recommend that for increased efficiency, case studies should be used alongside other data collection techniques and that case studies be used to solve real life situations relating to social problems and issues. Further, case studies should be used to solve certain emerging problems in certain organizations, and should not be used to make a generalization regarding similar problems in other organizations. Similarly, other case studies should be used to check on the similarity between the results to arrive at higher degrees of accuracy (Tillmann & Goddard, 2008). Question Four Do you believe grounded theory methodology that the authors have adopted is a good fit for this study? Do you agree (Yes/No). What improvements you believe can be made Grounded theory is a systematic process used in research where the researcher derives a theory from the data in the process of research. The aim is to explain how things work in certain set ups. Grounded theory approach tries to interpret the meaning of data, rather than just reporting it (Tillmann & Goddard, 2008). Further, in the context of researching SMA which little has been done previously to explain the existing situation, grounded theory becomes the most preferred tool for this study. Previous studies have been undertaken in the accounting area, but none has been specifically undertaken in relation to SMA, specifically sense making. I believe the use of grounded theory in this study was fit and relevant in the sense that previous studies had contributed little to the solution of the research problem. Furthermore, the researcher himself needed to find how sense-making is applied in organizations. The researcher used grounded theory because he also wanted to be open-minded and view the problem from different angles, a technique only grounded theory provides (Tillmann & Goddard, 2008). Similarly, with the use of grounded theory, research findings and methods are always refined and provides room for negotiations. The use of grounded theory by the researcher also allows collection of data to be undertaken over a relatively considerable duration, and again at different levels, hence allowing the researcher to draw reasonable findings and conclusions. However, in as much as grounded theory approach was relevant in this study; there are some forms of irrelevance portrayed. First, the theory presents very voluminous and very loud data, full of noise. Similarly, in as much as the author has acknowledged this, it is not right to start a study without pre-existing assumptions and theoretical ideas. Additionally, in practise, it is almost impossible to establish when the existing categories are saturated and when the theory is sufficiently developed from the set of data (Tillmann & Goddard, 2008). For improvements on this, i recommend that time need be taken to collect data, various techniques should be in data collection and that analysis should be undertaken properly in order to develop results of quality to formulate a new theory, which is the actual essence of grounded theory approach. Another improvement to be made on the use of this theory is that grounded theory should be used alongside other theories in order to eliminate positivist epistemology and to eliminate preoccupation that comes along with the theory in trying to uncover social processes. References Alexandre, R., Pires, R., Do, M., Alves, C. G., Lima, L., & Rodrigues. (2015). Strategic management accounting: definitions and dimensions. Retrieved 3rd May from http://www.aeca1.org/xviiicongresoaeca/cd/76d.pdf Alleyne, P., & Weekes-Marshall, D. (2011). An exploratory study of management accounting practices in manufacturing companies in Barbados. International Journal of Business and Social Science, 2(9): 49-59. Hanim, F., Fadzil, B. & Rababah, A. (2012). Management accounting change: ABC adoption and implementation. Journal of Accounting and Auditing: Research & Practice, vol. 2012, 2-15. Heidmann, M., Strahringer, S., & Schäffer, U. (2008). Exploring the role of management accounting systems in strategic Sensemaking. Information Systems Management, 25(3): 244–257. Rogério, L., Mateo, F.& Silva, F. (2013). Study of published articles on management accounting in Brazil and Spain. Rev. contab. finanç., 24(61): 11–26. Tillmann, K., & Goddard, A. (2008). Strategic management accounting and sense-making in a multinational company. Management Accounting Research, 19(1): 102–80. . Read More