Effect of Modernization of Management Accounting on Social Life of Workers - Example

Name: Lecturer: Course name: Course code: Date Report on the social implications of the decision making function of management accounting Introduction In current years, the area of management accounting has seen important advancement in the development of latest and distinguished accounting as well as control method. These developments comprise of modernization in such areas as computer based systems, flexible financial plan, enhanced costing procedures, and the application of assortment of quantitative technique in the collection, examination, as well as reporting of accounting statistics. It seems apparent that management accounting is quickly moving into a fresh age of improved technological expertise as well as superiority. The significant element is that management accounting still appears to be staging For while, accountants are becoming progressively more specialist in developing and using authoritative technical tools, on the other hand, they still tend to exhibit an almost entirety in deficient of responsiveness relating to the behavioral deliberation concerned in the use of these tools (Louise Burke 2006) (Robert H. Ashton 2005). This is predominantly inopportune since, to the degree that accounting presentation can from time to time cause un-preferred behavioral responses, the more authoritative and stylish these practice turn out to be, the more probable that their exploitation from a behavioral point of view will lead to unexpected and undesired consequence for the institute. Effect of modernization of Management accounting on social life of workers Change in organization culture organization culture is the way workers relate within themselves in an organization and therefore, the management accounting plan will change the organization culture of the workers, for example the new changes may make workers to sign their time in as well as time out electronically and linked up to their payroll and bonus as well as basic salary based on their time, the integrated system will as a result make employees to change their culture in order to suit the need of the new changes and thus affecting their social life. The approach is efficient since it will help the business in minimizing the operating cost as well as the idle time and at the same time increasing the productive label of the company since, the new management accounting plan is able to integrate all data of employees as well as the production cost and generate the final reporting of the company’s general performance as well as areas that need for more attention in relation to cost reduction. Workers will be efficient so as to cop up with the needs of the new system and to ensure that they are not laid off as well. Improved communication and coordination Management account is meant to enhance the communication and coordination among the staff of the organization since, the data flow into an implementation centre so as to avail the decision making with appropriate information which is relevant in making a decision. The communication can only be achieved through good financial plan as well as goal setting, this is only achieved where the management accounting provides communication channel out from the information centre to the implantation department (Marc Epstein 2010). This therefore implies that good management accounting plan will lead to harmonized flow of information as well as ensuring that workers understand what is expected of them as far as the goal and objectives of the company is concern hence leading to high output as well as workers job satisfaction. Well coordinated management accounting systems will therefore guarantee for achievement of targeted desired end results for the company since, employees knows what is expected of them as well as understanding the company’s goals to be met. In this case well coordinated business generates high returns to the business as well as to the workers inform of bonus. The social implications that, workers job satisfaction will create a positive organisitional culture as well as the way in which individual interact will be different from the previous social life of workers at place of work. Workers motivation Where there is goal congruence between the individual and the organization, Workers motivation will be observed. Workers should appreciate that by observing what is best for the c Company will make him also do well for the company. In this case, a correlation exists between the salary, bonuses and job satisfaction. It is evident that a new management accounting plan will lead to workers motivation where the change encourages workers participation and give a reward to individual who meets the desired end result (Louise Burke 2006). As much as the system is generally built to benefit the company by minimizing the cost, enhancing efficiency as well improving on the profitability ratio, it should also advantage the workers so as to create a conducive environment for working. Bonus pay, employee shift allowance as well off-duties are some of the key motivating factor that the management accounting plan should entails in order to guarantee for successive implementation of the new systems in the organization. It can be observed that a strong correlation exist between pay and performance and therefore to guarantee for high performance, workers need to be motivated. Motivation can only be attained where the working environment is satisfactory and also the needs of employees are well catered for. Management accounting decision is crucial in concluding whether employee will be satisfied by the decision and therefore a good management system should be the one that both considers the social implication of workers as well as the need of the organization in cost minimization as well as profit maximization. A company cannot achieve these objectives without considering the behavior of workers and they way they act toward introduction of a change. Resistance to change Modernization management accounting planning function implies that the system will perform decision making process for the entire organization accounting function. This will as a result lead to cost reduction since one computer will perform work that several employees could do. Employees will tend to resist changes that the management accounting will bring since they will fear that they might lose their job as well as the status quo in the organization. Therefore management should plan in advance on how to make employees accept them new change in the management accounting department (Don Hansen 2007). Workers must informed in advance of the news system as well as making them as part of the changing program and guaranteeing them of their status quo .This approach will mitigate risk of resisting the new change in the organization. I the new systems turns out to make a decision of laying off some workers due to high redundancy cost or idle cost being too high, there will be efficient cost reduction and improved revenue the business but the social implication of the laid off workers is that, the consumption as well as saving will reduce implying that their living standard will reduced since workers will be unable to meet their desire human basic needs. This will totally change the way individual used to live and therefore, existing workers in the organization will fear for unknown that the new decision from the management accounting system will lay them off. Therefore, employee culture in the organization will changing as well due to new changes brought about by the new system decision. Improved living standard Where workers are paid bonus for extra work, they add up to the extra salary paid to them this as a result would lead to improved living standards since, Workers will have more savings and less consumption due to availability of extra funds from planned budget. This can only be attained where the company is having a well coordinated and integrated management accounting plan that captures each and every worker’s data, conveys them to the relevant department and processed immediately. This therefore creates no biasness in employee’s relation with management as well as how they are treated in the organization. It can therefore be concluded that, enhanced and integrated management accounting is ideal since the system capture all the information that is relevant to an individual and process them. This leads to workers satisfaction and improved living standard as the well as per capita income of individual. The decision making process of the management accounting can therefore favors employees since the system records every workers detailing concerning hours worked, extra hours to paid as bonus as well as who to go for leave when and for how long. The systems provide all this data without biasness and therefore there is no worker over burden or long hours of working without being paid for extra workers (Debarshi 2011). Each personnel is satisfied at place of your work and hence developed positive attitude towards works leading to improve productivity to the business as well high returns to the company. The social implication of this consequence is that, employee will change their living standards and also new culture in the organization will be eminent. It is the sole responsibility of the manager to ensure that only desired culture that is in line with the organization goals and objectives is only tolerated. since, undesired culture in the organization will create conflict as well as group dynamic may develop that will in turn lead to workers resistance to change or the group dynamic will act as a platform for workers expressing their problem whenever it arouse. Group dynamic is undesirable since it affect the desired company’s end results by creating a stunted growth to the business or conflict between individual interest and that of the organization. Democratic management style Since the management accounting systems will be operated by few individual with expertise knowledge, the management will practice a democratic management style because the administration is certain of the integrated management accounting in providing reliable feedback. Therefore, democratic management style will change the social life of workers in that workers will tend to develop a positive attitude towards working and reduce resistance to change. Workers appreciate a free environment to work where there is no close supervision and consequently leading to networking with each other (Christopher S. Chapman 2009). This at the end of the day will change the way the organizations runned as well the organizational culture and therefore a more preferred way of managing staff will be eminent leading to improved revenue as well as the general operation of the business in line with employee job satisfaction Conclusion The key job of the management is to motivate the employees of the organization and to ensure that staff does the best for the business. Because management accounting represents the key prescribed information system within the business, it therefore implies that the key objective objectives of management accounting plan is to aid the organization in ascertaining as well as encouraging a preferred attributes that individual personnel should portray in the business which in itself is a desired organizational culture. The extent to which an assessment lf management accounting plan is conducted, must as well entails the extent to which the accounting systems contribute to encouraging as well as the objectives congruence of the organization entirely Workers tend to resist change and therefore management should ensure that workers are made to feel as if they are part of the change progression as well as guaranteeing their status quo in order to minimize chances of resisting the new integrated management accounting system (Botten 2007). An advantage can be realized from the new system where there is mutual condition between the staff and the administration and it’s the sole responsibility of the management to ensure that workers are motivated by ensuring that there is a constant flow of information from the information center to the staff. This can only be attained where the management is having an improved and sophisticated management accounting plan. The net advantage of workers satisfaction, motivation as well as enhanced management accounting systems is that, there is reduction in operation cost as well as idle time and ghost workers are eliminated. This would lead to increase in revenue of the company as well as ensure an efficient payroll system is operational and also workers understand what is expected of them in an effort of ensuring that the company’s goal and objectives is attained within the stipulated time frame. Reference list ABDEL, MAGDY G. Review of Management Accounting Research. 2013. Botten, Neil. CIMA Official Learning System Management Accounting . 2007. Christopher S. Chapman, ‎Anthony G. Hopwood, ‎Michael D. Shields. Handbook of Management Accounting Research. 2011. —. Handbooks of Management Accounting Research 3-Volume. 2009. Debarshi, Bhattacharyya. Management Accounting. 2011. Don Hansen, ‎Maryanne Mowen, ‎Liming Guan. Cost Management: Accounting and Control. 2007. Drury, Colin. Management Accounting for Business. 2005. John Innes, ‎Gweneth Norris. Corporate Social Responsibility: a case study guide. 2006. John Y. Lee, ‎Mark Epstein -. Advances in Management Accounting. 2013. Louise Burke, ‎Colin Wilks. Management Accounting Decision Management. 2006. —. Management Accounting Decision Management. 2006. Marc Epstein, ‎Marc J. Epstein, ‎John Y. Lee. Advances in Management Accounting . 2010. Norman B. Macintosh, ‎Paolo Quattrone. Management Accounting and Control Systems. 2010. Riahi-Belkaoui, Ahmed. Behavioral Management Accounting. 2002. Robert H. Ashton, ‎Alison Hubbard Ashton. Judgment and Decision-Making Research in Accounting. 2005. Sahaf, M A. Management Accounting: Principles & Practice, 2E. 2009. Seleshi Sisaye, ‎Jacob G. Birnberg. An Organizational Learning Approach to Process. 2012. Sisaye, Seleshi. The Ecology of Management Accounting and Control Syste. 2006. Read More