Why Innovation is Regarded as an Important Research Subject - Coursework Example

Innovativeness of Management Accountants Student’s Name University Affiliation Innovativeness of Management Accountants Why Innovation is Regarded an Important Research Subject Innovation has been considered a significant research subject. This is because innovations can enable organizations to successfully adjust and thrive in the unpredictable business environment (Rodgers 1995). However, management accountants have failed in their roles as innovators in the highly dynamic business environment. Thus, the topic is thus important owing to the changing roles of management accountants to the process of innovation, which is to provide information to managers in ways that are progressively relevant to the changing business circumstances. According to Lukka and Granlund (2002), the perceptions of the failure of the management accountants is prevalent in relation to the low levels of success experienced in executing ‘fresh’ inventions of management accounting such as the ‘score-card’ and ABC. Innovation is thus important to eliminate the lack of innovation described as ‘accounting lag’ by Kaplan (1986) to ensure management accounting remains relevant to the volatile business environment and addresses the information necessities of managers. The term ‘accounting lag’ as described by Kaplan was formulated at a time when there was limited research on innovativeness in management accounting innovation. Presently, innovation in management accounting describes different streams of the topic. The topic of innovation in management accounting has concurrently developed with researchers examining the changing roles of the accountants. Thus, the innovativeness topic in the discipline can be discussed alongside the changing roles of management accountants. For a long time, management accountants have been linked with different roles, known in light of the roles of attention directing, problem-solving and scorekeeping roles. While the role of scorekeeping and focus directing tasks commonly pay attention to reporting compliance and control-kind matters, the problem-solving objective pays attention to providing pertinent information for making decisions for business unit managers. According to Perera, McKinnon and Harrison (2003) and (Lukka and Granlund, 1998), the role of problem-solving has increasingly been more significant relatively as managers of business units have increasingly faced indeterminate settings in which emerging and diverse info is required to address the doubts. Thus, the topic of innovation in management accounting information is needed to keep pace with such kinds of uncertainties. Therefore, business unit managers have increasingly questioned the relevance of management accounting to address the changing information requirements of administrators of business units. Management accountants are called upon to use limited time in operating in the accounting role and spend extra time in businesses with those who need information on management accounting in a bid to be more innovative (Cobb, Helliar and Innes (1995) and Cooper 1996). These recommendations are linked with the duties of administrative accountants and the level to which they incline to an accounting or business unit perspective. In the innovation topic, the objective involvement function has been inadequately measured in management accounting. Nonetheless, the elements associated with a functional (accounting) or enterprise unit orientation has been seen in numerous case studies. In the topic of innovation, the description of the evolution of role involvement is critical. There are high possibilities that the literature on the topics of innovation and role participation of management accountants might be linked. According to research, it is likely that management accountants inclining towards a perspective of business unit will not merely formulate additional inventions but will incline to be more dynamic. On the other hand, management accountants will show an inclination to more orientation to functional (accounting). Emphasis of David Emsley on the Role for Theory Development Different concepts have been developed to describe the progression of inventions. Some theories such as that formulated by Chua and Briers (2001) suggest that the concept of actor-network should be developed to investigate the interconnectedness between boundary objects and actors. Some other researches have applied the institutional theory to describe invenions grounded on its main variables, which have been selected basing on their implication in the managerial literature as opposed to their importance in administrative accounting environments. Due to inconsistencies in studies, theory should be developed and tailored so that it links innovations variables of administrative accounting. As such, theory development is significant in innovations in management accounting. Emsley (2005) thus emphasizes the role of theory development to address different issues including the inconsistencies presented in different studies and the dynamic nature of the business environment. In theory development, innovation research that relates to individual innovations is differentiated from the innovativeness studies that address all innovations (Emsley, 2005). Another part of theory development develops the management accountants’ role involvement as a descriptive element by tracking its development via the literatures of management and business accounting. The theory development defines the element as the range to which organizational accountants have a business unit or a functional (accounting) orientation. The third perspective of theory development investigates the theoretical relation between the innovativeness and role participation of an administrative accountant. In general, theory development of management accountants considers innovativeness as a changing variable. Most studies of innovation within management accounting environments pay attention to one invention as the research unit. According to Granlund and Lukka (2002), the most researched invention is ABC. In dissimilarity, the innovation unit’s study as a dependent variable lays focus on innovation as the study unit that investigates all the inventions, which administration accountants might design to understand innovativeness. Theory has an important function such as defining the innovation concept. Rogers (1995) states that innovation is considered as “a concept, object, or practice, which is considered as fresh by a person or different adoption components. The description renders two significant consequences. The first definition comprises numerous kinds of innovation comprising new services or products, technologies of processes of production, new administrative structures or systems and new programs that concern the memberships of the organization. In management accounting applications, theory suggests that innovations do not merely encompass administrative accounting skills but transformations to role practices as well. In the emphasis for theory development, David Emsley suggests that the second effect of the description of innovation is that an inventions can be considered as an invention on its evolution track from the original concept to its full implementation (Tuopela and Partanen, 2002). Theory development in innovation is challenging because researchers have identified many developmental stages in the processes of invention process. More challenges come about during theory development because not all inventions essentially undergo similar phases or in similar sequence and could advance to over one stage at any moment. Subsequently, without the ability of defining the instance at which an idea becomes an invention, the connotation of an invention returns to the innovation source, which represents the concept idea itself. Whereas the description is less challenging for studies, which investigates one innovation for instance, ABC (where innovation role shows the phenomenon under study), it is more challenging when investigating the theory of innovativeness development. This is because the process itself concerns with many innovativeness innovations developed, each having its own meaning on the continuum from original idea to full implementation. Without putting these dissimilarities into consideration, a management accountant with many ideas but fails to implement any of them can be categorized as more inventive in comparison to an administrative accountant who advances one improvement to complete operation. The Significance of Study Innovativeness and the Adoption of the Approach Emsely (2005) suggests that there are various reasons for studying innovativeness in management accounting. These reasons come against issues arising from differences experienced in the discipline to eliminate issues of failure of the administrative accountants to implement their ideas. Thus, there exist different motives why it is critical to learn innovativeness (in contrast to a mere invention). According to Emsley (2005), studying innovativeness is critical because it provides a complete consideration of the range to which an administrative accountant innovates, which can be established by learning one invention. The role is significant and necessary especially where the theory investigates the factors that compel management accountants into innovating in larger scales. Studying innovativeness is also important given that whereas a lot might be known about one innovation, it does not necessarily follow that the innovation represents all the general innovations. Factors, which are significant to the innovation (for instance ABC), might not be critical to other innovations. However, with a rising number of innovations researched, impact of explanatory variables pertinent to any one particular innovation reduces. The result is that generalizations can be made more easily. According to the author of the article, studying innovativeness is important because the process embraces different innovations, which then enables their categorizations. The categorizing of inventions is critical as it gives way to the likelihood that descriptive elements including role participation influence various inventions in diverse ways. The contingency approach demonstrated might be expected given the extensiveness of contingency concept in other places in literature review of administrative accounting. Nonetheless, these relations have not yet been examined comprehensively o any great level. A critical class of innovation, which has been considered as critical in the literature of management comprises non-dynamic and dynamic innovations. According to Burns and Scapens (2000), the other one is the dynamism in innovativeness begun to lure the focus of administrative accounting scholars. Radicalism mirrors how diverse an invention to prevalent radicalism and practice. These are further explored through the Kirton’s typology. The author has adopted the approach because the topic of radical innovations represents a fresh management accounting practices or skills, which are attributed to a willingness to ‘do things in a different way. In this light, the approach seeks to respond to the dynamic management accountants’ settings. For instance, introducing the analysis of the profitability of customers firstly while non-dynamic innovations reflect transformations to presently occurring administrative accounting practices and skills that are associated with a yearning to undertake matters in improved ways. For instance, adjusting an already created system of analyzing variance. The Role of Incentives in Motivating Management Accountants Incentives have a role to play in role involvement of management accounting. Incentives influence the centrality of the authority, responsibility and the way a management accountant undertakes his duties. In specific, the incentives element of role involvement influences the management accountant’s motivation to innovate. According to Emsely (2005), an incentive has a role to play and influences their development of innovations through the motivations to innovate. In this case, incentives motivate the management accountant’s future endeavors and rewards. The innovations also comprise the improved satisfaction in the job, which often comes from additional enrichment in the job. The incentives given to the management accountant are based on different criteria. On a large basis, the superior of the management accountant often determines the incentives. On the other hand, the business unit manager determines their incentives for management accountants having an orientation towards a business unit. In such scenarios, incentives have a likelihood of being directed towards the attainments of objectives of business units where the administrative accountant will seek to generate information, which is geared towards the attainment of the goals. Consequently, it will be least likely be restricted by functional accounting agreements. Apart from attaining the different business unit needs, inventions have a likelihood of being radical in comparison to prevalent practice. For functionally orientated administrative accountants, their managers will have a leaning to aligning to administrative accountants’ motivations with the attainment of practical objectives. These incentives include compliance goals and the management of cash flows than business unit objectives. In these kinds of environments, there is less motivation and incentives for them to follow innovations created to attain the goals of business unit supervisors. The scenario can happen if administrative accountants with a practical predisposition have to exert sometime and energy to convince the enterprise unit supervisor of the innovation gains or whether the inventions endangers the functional goals attainment. The propositions collectively culminate in the anticipation of the management accountants involving in roles linked to their ability to invent. As such, management accountants having an enterprise unit orientation will become more inventive and will most probably develop dynamic inventions in comparison to administrative accountants of an accounting perspective. Other ways of motivating management accountants besides the monetary incentives are non-financial incentives that satisfy the self- actualization and ego needs of workers. By satisfying the needs of the management accountants, the functional accountants or business unit managers can satisfy their psychological needs through using non-monetary incentives. Non-monetary incentives could comprise different aspects such as security of service. The management accountants will consider job security as an incentive that motivates them. With a secured job, the management accountant will most likely put more efforts to attain the objectives of innovation and role involvement. This also assists because he is distant from mental pressure and he can perform the best to the organization. By giving recognition or praise, the organization will provide a non- financial incentive that will satisfy the employee’s ego needs. The mere praise will encourage a management accountant to innovate more. Therefore, the management accountants will respond to praise and give the best of their efforts to a concern. References Briers, M., & Chua, W. F. (2001). 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