The Success of a Centre of Calculation - Literature review Example

The Success of a Centre of Calculation Name: Course: Institution: Date: The Success of a Centre of Calculation The conceptualization of any form of success or failure in accounting through technological development often leads to the argument that successful accounting does not only involve the opinions of the activities of these who are right, or those with a higher representational level of faithfulness (Briers & Chua 2001, p. 267). A new cost management technology does not succeed due to their ability to provide a closer approximation to the true cost, neither to they succeed since they are developed based on the right facts. Rather the success or failure of new cost management technologies succeeds due to its ability to hold diverse facts and interests together, ensure temporary stability by providing a platform for acknowledging the truth of certain facts (Briers & Chua 2001, p. 267). Hard and stable facts that arise from any new and reliable cost management technology cannot be known in advance but after the adoption of the technology (Briers & Chua 2001, p. 262). With reference to the argument that the success of a centre of calculation does not entirely lie in the hands of the designers but in the hands of the subsequent actors, this paper seeks to provide a critical review of change in management of accounting techniques by providing a discussion of the role of related systems in the construction of the realities of an organization’s performance. This study will use the actor- network approach to facilitate understanding. Factors that influence change in the management of accounting techniques Heterogeneous networks of actor as and actants Change in the management of an organization’s accounting techniques is often considered as the possible outcome of numerous and varied interconnections between the local and the cosmopolitan networks of the actors and the actants. The locals compromise of the individual networks of association that are already established within an organisation (Briers & Chua 2001, p. 263). The perspective of the cosmopolitan associated to the relationships that result from the plurality of cultures that must be understood as distinctive entities (Cooper & Dart 2009, p. 25). For any form of change to be realized the cosmopolitan cultures must be willing to engage each to establish change that is based on divergent cultural experiences. Cosmopolitans are often rich in knowledge, the ability to operate at the highest standards. In addition, they also possess the best relationships that can help in accessing different resources around the world (Briers & Chua 2001, p. 241). The essence of the relationship resulting from the heterogeneous networks of different actors within the organization arises from the fact that the cyclical adoption of a new technology in the management of accounts and the abandonment of already existing costing technologies cannot be considered as a linear outcome of a careful cost benefit evaluation exercise (Briers & Chua 2001, p. 242). Rather it is an analytical exercise that follows the procedures of numerous neglected dimensions of accounting change (Haldma & Laats 2002, p. 12). While borrowing from the stratifies systems theory, that seeks to organize outcomes according to their level of importance to organizational success, heterogeneous networks of actors and actants will only generate desirable changes in the accounting system if they are initially connected to an activity-based costing (ABC) system (Briers & Chua 2001, p. 264). This system allows for the engagement of any new technology to assess the possible outcomes in the event that it is adopted (Information Resources Management Association et al 2001, p. 100). This means that a model of change in the accounting system of any organization that is built on the heterogeneous system actor and actants has possesses numerous inferences for the concept of agency (Briers & Chua 2001, p. 264). The first implication is that it can result in extra organizational origin of internal costing changes. This is because such a change model may attract cosmopolitan consultants and trans boundary objects such as the activity based accounting (ABC) systems (Chapman et al 2007, p. 50). In addition, this model can also be engaging and it may require seminars which allow for the discussion of the boundary objects. This means that in the technologically advanced world, change in organizational accounting is not only influenced by the actions of the local management of an organization but also by other factors that are distant from the organization (Wanderley & Cullen 2013, p. 29). Secondly, the management of change is not a heroic affair but an initiative that requires the involvement of the management. Their involvement is necessary but not sufficient for change to occur considering that there are other actors within and outside an organization whose involvement is equally important for the realization of success (Wanderley & Cullen 2013, p. 29). Through the involvement of the management, other local networks and the cosmopolitan networks, an organization can mobilize its tea of accountants considering the importance of their input in the adoption of new accounting technologies and in the shutting down of old technologies (Briers & Chua 2001, p. 264). This must however be considered in situations where the new technology is bound to improve of on the efficiency and effectiveness of the organization in the execution of its mandate and in the organization of its accounting records (Bhimani & Bromwich 2010, p. 45). Boundary objects that unite the world of actors Different boundary objects that are essential for the development of new accounting technology in an organization often criss- cross within and outside the organization depending on their points of origin and their role in influencing change (Briers & Chua 2001, p. 264). Data fountains that are composed of inventory information that are in formats which are easily accessible often hold the management of an organization from numerous departments together (Bhimani & Bromwich 2010, p. 45). This provides an enabling platform for the management to down load information that is combined to serve the interest of all members of the management. In addition, such repositories can also be essential to ensure the temporary success of the operationalization of every accounting system within an organization (Briers & Chua 2001, p. 265). The ideal and visionary objects such as better accounting technologies and world best practice must be considered in the process of accessing the role of accounting objects in the development and adoption and operationalization of new accounting technologies (Briers & Chua 2001, p. 265). Activity-based approach to the understanding of change in cost management considers ABC model as essential and hard enough to attract diverse parties together and the availability of a periphery within the same model that is relatively soft to facilitate easy flow of information and relevant data across actor-world boundaries (Mancini et al 2003, p. 33). At its core, ABC is constituted by interconnected statements which include activities consumer resources, products trigger activities, volume based allocation methodologies can probably mislead decisions that are product related, and, product cost should be a reflection of all resource consumption (Briers & Chua 2001, p. 265). The soft periphery within ABC model allows for flexible construction of cost objects, cost drivers, activity cost pools, and activity levels. These are catered for by the local circumstances. The soft nature of the periphery allows for the numerous translations of the ABC model in the vent that an organization desires to arrive at change that is based on its activities (Briers & Chua 2001, p. 265). There are often three techniques that can be used in the development of a comprehensive model of change in costing management. In the initial stages of change in management of costs, the project often begins with the development of broad claims towards the realization of change (Briers & Chua 2001, p. 265). However, through the involvement of numerous actors while considering the permanent and the temporary objects of boundary, these aims are often reduced into narrower activities in the form of costing tasks (Thukaram 2003, p. 121). In the third stage of initiating change in costing management, the management and other actors through the provision of different boundaries are often able to standardize the work methods through the development of formulas as an important boundary object (Briers & Chua 2001, p. 265). The formula developed is considered as a boundary since it is definitive of the differences between the old technologies defined by the old formulas and the new technology. Standardization and the development of formulas are also essential in binding together information that is generated from different sources (Briers & Chua 2001, p. 265)This not only makes the information comparable to existing technology but also gives credibility considering that it was generated. For the ABC model of accounting to work, it is the responsibility of the business to rub out the product differences in a specific way. The products identified by the designers are merged to form a new product (Briers & Chua 2001, p. 265). This is based on the argument that these technologies that are merged are based on similar cost structures or are founded on identical cost drivers. These are considered as the rules that are necessary in the development of new technologies for managing costs (Briers & Chua 2001, p. 265). Upon the establishment of the rules of merging different aspects of existing technology to establish new ones, all users must then be integrated into the system and this may require the expertise an external consultant especially when developing these technology. This is often applicable when the actors in different operational units do not follow the coding instructions that are unique to the technology. Rule following is therefore critical to the understanding and the development of hard and consistent change. In addition, discipline among actors has to extend across time (Thukaram 2003, p. 122). This discipline must be witnessed from the initiation of the project, the design and the adoption and the implementation process. The success or failure of the technology will not be as a result of the competence of the designer but the availability of the subsequent actors to engage in effective and disciplined use of the technology throughout the period of its existence (Briers & Chua 2001, p. 265). The designers of the project despite their absence after the adoption must be involved inconstant update of the standards and contents of the technologies (Chapman et al 2009, p. 56). This can only be necessitated if the actors understand the operationalization process of the technology and be able to provide information to the designers of the ABC model of costing management in a systematized and standardized manner ((Bhattacharyya, 2006, p. 20). It is important to note that it is the responsibility of the actors to follow the coding instruction of the designer of the consultant even after the implementation and operationalization of the new technologies (Briers & Chua 2001, p. 265). This is based on the assumption that when the local actors fail to operate in accordance with the instructions of operation, then there is a high probability that the systems may fail (Zainun & Smith 2010, p. 36). The development of new technologies in costing management also generates coincident boundaries which are essential in binding different actor-worlds. The acceptance of a business model such as ABC is largely based on the ability to identify the similarities in the views of actor drawn from different organization or different departments within an organization (Briers & Chua 2001, p. 265). Such similarities will ensure that the resultant ABC model of accounting will be formulated on the basis of agreeable terms between the actors. This therefore means that there is a possibility of different actors generating similar ideas to enable the formulation of profitable and stable technologies in the accounting process (Armstrong 2000, p. 112). Boundary objects therefore play a critical role in the definition of the success or failure of any accounting technology. Proper initiatives are only possible in organizations that not only embrace diversity but also unity of thought (Briers & Chua 2001, p. 265). In addition, it is the responsibility of employees within an organization to develop an understanding of the new technology to enable profitable and effective operationalization (Bhattacharyya, 2006, p. 24). Success and failure The strengths and weakness of any new technology in costing management are often definitive of it success or failure. Better technologies are considered successful when they are all inclusive of the important aspects of accounting (Briers & Chua 2001, p. 265). Through an integration of the diverse and complex operational aspects of an organization, a successful costing management technology will serve the purposes of cost control and proliferation of the product (Zainun & Smith 2010, p. 16). A successful system must also have the capacity of costing a large range of products in a standardized and controlled manner especially when using a detailed cost variance reporting technique. A successful technology in costing must provide room for constant improvement to maintain its credibility and authenticity (Tsamenyi et al 2009, p. 100). The failure of a technology in accounting is not often a result of poor strategies or inefficiency of the technology but due to the failure by the actors to fully engage the technology as required by the designers (Allahyari & Ramazani 2011, p. 34). In such situations, the technology will be lacking in terms of mobility, combinability and stability (Briers & Chua 2001, p. 266). In addition, high levels of indiscipline among actors may also result in the failure of the technology due to failure to adhere to the standards and the operational code of ethics essential in the operationalization of the technology to ensure the success of the organization (Briers & Chua 2001, p. 266). Conclusion Organizational success or failure especially on matters related to accounting is highly dependent on the ability of the local and cosmopolitan actors to realize the challenges that the organization is facing in costing management. These challenges are expected to derive the organization towards the development of new technologies as a way of improving on the organizations efficiency and effectiveness in costing management. Once developed, with the help of an external consultant or designer, it is the responsibility of the actors within the organization to operate in accordance with the rules and the operational procedures that are necessary to ensure the realization of organizational goals. In addition, the actors must collect information in a systematized and standardized manner to facilitate constant improvements to the system. The actors unlike the designers therefore play a crucial role in the determining the success or failure of new accounting technologies. References Allahyari, A & Ramazani, M, 2011, Studying the factors which Delay management Accounting Changes (Case study of Iranian Manufacturing Firms). Internatonal Journal of Accounting and Financial Reporting. Macrothink Institute. Vol. 1, No. 1 Armstrong, Michael. 2000. A handbook of management techniques. London: Kogan Page. Bhattacharyya, Asish K. 2006. Principles and practice of cost accounting. New-Delhi: Prentice- Hall of India. 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Zainun, T & Smith, M. 2010, Management Accounting and Organizational Change: An Exploratory Study in Malaysian Manufacturing Firms. Jamar, vol. 8, No. 2 Read More