Management Accounting and Organizational Sustainability - Essay Example

Running Head: MANAGEMENT ACCOUNTING AND ORGANIZATIONAL SUSTAINABILITY Management Accounting and Organizational Sustainability Name Course Institution Instructor’s name Date Management Accounting and Organizational Sustainability Management accounting is a branch of management that entails accounting as well as organizational sustainability and are two very important branches of any organization. The accounting department is basically involved in the assessment of the organization’s profitability from one financial period to the other. Significant stakeholder pressure is applied to companies to enhance their profit performance from one financial period to the next (William, 2009). Concerns have been expressed for some time that accounting numbers, and in particularly those related to profit, are far too narrow a gauge in assessing corporate performance. One response to those concerns has been the development and implementation of broader-based tools, such as the balanced scorecard, as a means of capturing both financial and nonfinancial elements of performance. However, a broader issue has emerged focusing on organizational sustainability. The literature has more recently addressed issues of profit sustainability as well as sustainability from resource and environmental perspectives (Broekhuis, 2003). One implicit premise underpinning the discussion on sustainability is whether, for example growth in profits, can continue to be feasible given an ever-increasing array of constraints. Sustainability is likely to have implications for management accounting in terms of its role in the calculation and reporting of organizational performance. It may mean that existing assessment tools are poorly equipped to respond effectively to sustainability-related matters. The paper explains in details the above facts about organizational accounting and sustainability. Organizational Sustainability The term organizational sustainability refers to the ability of a group of people to be able to endure the external as well as the internal pressure of a certain culture especially through the change in innovations and technology on the process of innovation as the organizations tries to deliver the products they specialize in production (Broekhuis, 2003). This means that for any organization to achieve that there is a need for a lens to look through and a path to follow. This is whereby many organizations both profit making and non-profit making apply the principle of sustainability, which is a model of Leskar. This kind of model contains a number of very important principles, which must be followed to achieve all the goals of the organization (William, 2009). Development of the organizational team a process that entails the conversion of the most committed group of people into the cohesive unit is one of the principles. The second principle is the organizational process of management. This entails the process of redirecting the steps and actions that are being taken by the management to yield more fruits. Organizational mapping of the product is the next principle. This involves the process of capturing the essential leader’s part of the vision. It involves graphical representation, important phases, concepts, milestones and stages that are represented in such a way that they will capture the audiences. Through this kind of method, illustrations of the best methods tasks and activities are revealed to show the team members the way to achieve their goals. Critical issue driving the sustainability debate There are number of sustainability issues that are driving the debate of sustainability and assess in any given organization. These issues are likely to impinge on the management of the accounting’s capacity especially in delivering performance related-information. The result of the above could be either negative or positive depending on the type of impact. This explains why the most successful businesspersons and women who successfully manage their complexity in terms of sustainability gets occasionally rewarded because they are able to deliver intangible advantages, which lead to the most tangible benefits like the best balance sheet, better brand images as well as best stock valuations. Sustainability involves a variety of issues in the business like supply chain like, Customer care, opportunities for the business betterment, the participation of the internal departments, all the profit making tactics and strategies and pro activities. All of these issues enable the organization to seize all the opportunities and avoid all the possible risks. Partnership of the organizations as one way of reaching sustainability has been under debate. This is especially due to the short-term partnership that has many disadvantages to the organization in terms of resource differences and the issue of identity, marketing and fundraising (Terrence, 2003). All of these are due o the differences in the organization’s ability to have the human and material resources. The bigger company is likely to have more resources as compared to the smaller one. The change of institutional programs is another very important topic of debate as far as the issue of organizational sustainability is concerned. This is because some of the changes that are made in the organization are to boost the income of a certain program, which may not be permanent. This means that once the project time is over the measure that was put forth or the innovations and new technologies that were put forth then ends up being a waste. The key debate here being the issue of resource wastage. Another very important issue of debate is leadership transition. Changes in the leadership of some department of the organization may sound as the best option towards achieving sustainability. However, many questions arise. The new leadership at times affects the productivity of the workers due to the new relationship of the leader and the workers hence not helping the organization achieve the sustainability goal. The change of the environment is another issue as far as sustainability is concerned (Finlay, 2000). This is especially in terms of the economic changes within a given environment the organization is located. This may interfere with the profits due to change in the cost of production and it may interfere with the workers output. Various approaches of sustainability and their effect There are a number of approaches that have been adopted by many organizations in their effect to achieve sustainability. According to the assessment that has been done some contributed to a clearer understanding of organizational performance through the systematic integration of factors relating to sustainability while others did not. One of the approaches that many organizations use is partnership. Many organizations start a partnership to join effort to achieve sustainability. However, not all of them achieve it. One of the reasons being the size and strength differences of the partnering organizations in terms of resources both finances and human resource (Finlay, 2000). Another complication that is brought about by the partnership approach is the issue of changes in leadership. After the partnership, the two organizations need to get new leadership for running the partnership. This issue causes some difficulties for the people especially the employees that will work under a new leadership not used to. The culture change and the working style change is another approach of sustainability (Finlay, 2000). This is whereby innovations and technologies are introduced in the organization; this is one of the approaches that many organizations are also using to achieve sustainability. This approach demands for some extra finances to purchase new machineries or install new technology as well as hire new work force. It could be such an expensive approach to the organization especially if the organization is very small in terms of its finances. This may even lead the organization to face some financial crises. The third approach is the quality. This is whereby the organization aims at delivering quality products by striking a balance between social issues, economic prosperity and achieving a healthy ecologic environment. The following four aspects must be considered very carefully as far as the issue of quality is concerned. Quality control, quality inspection, total quality management and quality assurance (Terrence, 2003). All of the four factors are different ways of achieving good quality production in the organization. They can bring a positive or a negative effect in the organization. If they are very well applied, then they enhance production of very good quality products but if not well applied they do affect the sales of the services and products due to very low quality. Another very important approach is dealing with the organizations boundaries and responsibilities (Thompson & Martin, 2005). This is whereby the role and the objectives of the organization are laid down. This is to ensure that the organization always operates on its line of duty. Another very important issue as far as boundary and responsibility is concerned is the roles of the employees. All the employees must clearly know their roles and responsibilities within the organization so that each and every of their effort is geared towards bringing some yields in the organization (Broekhuis, 2003). Improvement of performance assessment There are so many ways of improving the performance assessment especially by focusing more on the issues of sustainability in the organization. It is very evident that sustainable performance and management especially in the public organizations is of great benefit to the organization. This is especially for the organizations that have adopted practices of social responsibilities. This involves a wide range of dimensions as far as performance is concerned. It is very evident that the achievement of sustainable management is directly dependent to the sustainable performance (Burns, 1961). This is where the issue of responsibility of every employee as well as the entire management comes in. According to the assessment that has been done performance assessment contributed to a clearer understanding of organizational performance through the systematic integration of factors relating to sustainability while others did not. One of the ways is partnership. Many organizations start a partnership to join effort to achieve sustainability. However, not all of them achieve it. This is because on assessing the achievement of the organization at that particular point, most of them are found to have achieved nothing. This is because of the challenges that the organizations face in trying to adapt to the new ways of operations brought by the partnership. Since assessment involves monitoring of the activities that are taking place in the organization, then it ensures that all the efforts geared towards sustaining the organization are constant (Burns, 1961). The performance of the organization may not be measurable but the sustainability performance of the organization is measured perfectly well. When the assessment ways are improved, then it means that the issue of sustainability and innovation can be better monitored. This is because there can never be a sustainable solution which is not accompanied by innovation. This is because of the changes that are occurring in the world especially as far as the issue of technology is concerned. There is need for any organization to be flexible, adaptable and innovative to be able to achieve a lead in the market (Peter, 2007). This is because these factors gives the organization a platform to be able to seize the market by exploring some form of new markets as well as taking more risks in a more sustainable approach. Performance assessment in terms of personal performance must also be considered. This is whereby within the organizations that embrace the personal change, individual employees get attracted to the new course within their field and then pursues them. As a result, they not only gain some personal benefits but also add up value to the organization. This is because they are able to add new ideas to the organization hence improving its performance. When there is an assessment of the organization and the result shows that there has been some great organizational change in terms of new ways of action, leadership, processes, structures and values but in a positive way, then there is a great achievement of organizational sustainability. Improved ways of performance can be very effective in achieving organizational sustainability (Thompson & Martin, 2005). Conclusion There is a very great importance of maintaining organizational sustainability. This is because when an organization achieves sustainability in that area its performance in all areas including accounting also improves. This is because ssustainability is likely to have implications for management accounting in terms of its role in the calculation and reporting of organizational performance. It may mean that existing assessment tools are poorly equipped to respond effectively to sustainability-related matters. In addition, improvement of performance assessment in any given organization is very important. There are so many ways of improving the performance assessment especially by focusing more on the issues of sustainability in the organization all of which are geared toward improving the performances of the organization. Reference Broekhuis, M., 2003. Improving organizational sustainability using a quality perspective. Oxford University: oxford university press. Burns, T. 1961. The Management of Innovation. London: Tavistock. Finlay, P. 2000. Strategic management: an introduction to business and corporate strategy. New York: Pearson Education. Peter, F., 2007. The practice of management. New York: John Wiley & sons. Terrence, L., 2003. Management accounting. Chicago: University of Chicago. Thompson, J. & Martin, F., 2005. Strategic management: awareness and change (5th Ed.). California: Cengage Learning EMEA. William, R., 2009. Knowledge management and organizational learning. Canada: prentice Hall. Read More