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Organizational changes in Management Accounting - Essay Example

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Summary
Organizational changes in the last few decades made it compulsory for management accounting techniques to develop and multiply at an unparalleled rate. But the view of some critics is that these changes are only reinvention of the wheel which takes place every few years…
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Organizational changes in Management Accounting
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Download file to see previous pages Kaplan (1984) remarks; "Despite considerable change in the nature of organizations and the dimensions of competition during the past 60 years, there has been little innovation in the design and implementation of cost accounting and management control systems."
In spite of important changes taking place in the quality and operations of organisations, the techniques adopted by companies and those mentioned in text books of management accounting date back to 1925. Thus Kaplan and many other scholars, encourage researchers to develop the subject of managerial accounting by conducting research and case studies. They state that "to describe and document the innovative practices that seem to work for successful companies" more and more research work and case studies have to be taken up.
Following Kaplan and others call for research work and case studies a plethora of novel procedures in management accounting found its way into the field. A few of such new techniques were Just-in-Time (JIT), activity-based costing (ABC), and total quality management (TQM) which were accepted.
According to Wendy L. Currie (1999) the objective he states is to incorporate into a single framework a number of factors that tempt the function of management accounting techniques in organisations using cases or degrees of organisational alterations categorised by N. Venkataraman.
N.
N. Venkataraman (1994) remarks that "The underlying goal for the framework is designed to reveal the distinctiveness of each technique in the organisational change context. Specifically, is there a systematic approach to applying change techniques and anticipating issues we may encounter in the change process"
This paper examines the thesis statement which is;
"Is this the hour to critically evaluate and reconcile the need for new management accounting techniques in the 21st Century with the compelling case for understanding and applying aspects of management accounting that have been taught traditionally" (Anthony, R, 1965)
Formulating the theoretical account
Thomas Walther, et al, (1997), remarks that the new environment which is produced by the authority of computing and the dislodgment of conventional accounting tasks, companies are counting on their financial specialists to "act as business partners with operations managers" by furnishing information to back up decision making.
Christopher D. et al (1997 a, and 1997 b) states thus; "Accountants are increasingly involved in strategic management through the development and implementation of new accounting models integrating financial and non financial information". If the essence of the techniques intersects, accountants must clarify these intersecting areas to demonstrate how they may enforce to patronise different strategic intentions.
Factors which call for changes in Management Accounting
Internal organisational elements like organisational structure and culture, determine change and the execution of management accounting methods. But still sometimes these factors are not considered while implementing management accounting techniques. According to Jerold L. Zimmerman, (2001): "Total quality management, reengineering, activity-based costing, the theory of constraints, value chain management, just-in-time, and the balanced scorecard all assume that agents will enthusiastically adopt the new approach because it promises to maximize firm value."
J. H. Waterhouse and Peter Tiessen (1978) ...Download file to see next pagesRead More
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