Statement on the Social Implications of the Decision-Making Function of Management Accounting - Essay Example

Name: Lecturer: Course name: Course code: Date Statement on the social implications of the decision making function of management accounting Introduction A management accounting decision will ether affect the positive or negative social implication to workers? Workers tend to resist changing in an organization and therefore, management should ensure that workers are informed in advance of the new system. A good management accounting decision will benefit both the company and the employees since, where there is a conducive working environment, there is workers job satisfaction leading to increased output to the company. Practitioners should there consider the social implication that the new management accounting decision will bring to the organization and its impact on the overall performance of the company as well as employees reaction. There has been dramatic progression in the field of Management accounting in recent years concerning the newest as well as great accounting and also the cost control method. The progression encompasses the transformation areas such as computer based systems, elastic budget, improved costing measures, and the application of variety of quantitative method in the gathering, assessment, and reporting of accounting data. Therefore, it is obvious that management accounting is rapidly changing into a latest age of enhanced technical knowledge and pre-eminence. The important constituent is that management accounting under-performing, practitioners are becoming increasingly extra professional in developing as well as appreciating the dependable scientific apparatus, and practitioners also demonstrate the whole in under provision of responsiveness connecting to the behavioral consideration relating to the use of these accounting apparatus (ABDEL 2013). This is mostly inconvenient because, to the extent that accounting management can create un-ideal behavioral reactions, further dependable as well as trendy the practice turn out to be, the more credible their development from a behavioral point of view will lead to unanticipated and un-preferred significance for the organization. Social impact of Management accounting decision on employees of an organization The decision of the management accounting system can either be positive or negative to the employees. For example, a decision to lay off workers due to high redundancy cost or too much idle time will negatively affect the social life of workers. Also decision to award bonuses to workers will affect the social life of workers positively. Some of the detail consequence of management accounting decision on employers is explained in detail as follows. 1) Positive implication on the social life of workers A) Enhanced lifestyle Employees appreciate working in a business environment where there efforts expended on the work are recognized. For example, where there is bonus for extra hours worked in the organization, the bonus increases the income of the employees this as a result would lead to better living standards in view of the fact that; 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 B) Transformation in employee’s way of life New changes may command that every human resources to use the biometric system in signing their time in as well as time out and connected to their payroll as well as additional benefit and the basic pay based on their time, the integrated system will as a result make employees to change their way of life so as to go well with the need of the new changes and consequently affecting their social life. The method is relevant because it aids the company in reducing the operating expenditure as well as the idle time and at the same time increasing the level production 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. C) Employee inspiration Workers motivation at place of work will be depicted where there is Existence of objective correspondence between workers and the organization. Employees must be grateful for that by observing what is best for the business and hence, will make them do well for the business as well. Consequently, an association will be envisaged between the salary, bonuses as well as the job contentment. It is apparent that a latest management accounting plan will make employees to be motivated where the change supports employee’s contribution and give an incentives to individual who meets the preferred end result (Louise Burke 2006). As much as the system is generally built to advantage the business by reducing the outlay, enhancing effectiveness as well improving on the productivity ratio, it must 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. D) enhanced communication as well as harmonization 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 organizational culture as well as the way in which individual interact will be different from the previous social life of workers at place of work. E).autonomous administration approach In view of the fact that the management accounting systems will be operated by a small number of individual with proficiency, the organization will practice an independent organization approach since the management is convinced of the integrated management accounting in providing dependable reaction. Consequently, autonomous management approach 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 are grateful for a free environment to work where there is no close administration and as a result 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 2) Negative implication of Management accounting decision on workers A).Conflict and resisting changes in the organization Transformation of the management accounting decision making function means that the system will execute decision making process for the whole organization accounting function. This will lead to expenditure cutback because one workstation executes work that numerous workers could do. Workers will tend to refuse to go along with changes that the management accounting will bring because they will fear that they might lose their job as well as the status quo in the business. Consequently administration ought to 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 method as a result will alleviate risk of resisting the new change in the organization by employees. On condition that the latest 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. Conclusion Human resources tend to refuse to go along with change consequently administration ought to guarantee workers of their job security by ensuring that they are assured of their status quo in order to curtail consequence of refuse to go along with the latest incorporated management accounting system (Botten, Neil 2007). A benefit can be realized from the latest structure where there is joint harmonization among the employees and the management and it’s the sole accountability of the organization to make sure that personnel are encouraged by ensuring that there is a stable flow of information from the main information hub to the staff. This can just be achieved where the organization is having an enhanced as well as complicated management accounting arrangement. The benefit of employee’s contentment, inspiration and improved management accounting systems is that, there is lessen operation charge and redundant cost. This would lead to enhanced income to the business and guarantee for a well-organized payroll system as well as also employees comprehend what is expected of them in an endeavor of guaranteeing that the company’s goal and objectives is attained within the stipulated time frame. 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. since management accounting correspond to major prearranged information system inside the company, it therefore means that the purpose of management accounting arrangement is to assist the business in ascertaining as well as heartening a favored characteristic that a person ought to depict in the business which in itself is a preferred organizational way of life. 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. 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