Four obstacles facing the management accounting professionals as they seek to step up as global leaders

No matter how aspirational they are, management accountants face a series of roadblocks in the course of building careers in organisations. Experts reveal the four key obstacles that need to be addressed in the course of becoming global leaders.

A framework for cost-aware process management : generation of accurate and timely management accounting cost reports

Organisations are constantly seeking efficiency improvements for their business processes in terms of time and cost. Management accounting enables reporting of detailed cost of operations for decision making purpose, although significant effort is required to gather accurate operational data. Business process management is concerned with systematically documenting, managing, automating, and optimising processes. Process mining gives valuable insight into processes through analysis of events recorded by an IT system in the form of an event log with the focus on efficient utilisation of time and resources, although its primary focus is not on cost implications. In this paper, we propose a framework to support management accounting decisions on cost control by automatically incorporating cost data with historical data from event logs for monitoring, predicting and reporting process-related costs. We also illustrate how accurate, relevant and timely management accounting style cost reports can be produced on demand by extending open-source process mining framework ProM.

Management accounting adaptability in an integrated information system environment

In this study, we explore the relationship between the qualities of the information system environment and management accounting adaptability. The information system environment refers to three distinct elements: the degree of information system integration, system flexibility, and shared knowledge between business unit managers and the IT function. We draw on the literature on integrated information systems (IIS) and management accounting change and propose a model to test the hypothesized relationships. The sample for this study consists of Australian companies from all industries.

The making of control : an ethnomethodology of choosing management accounting systems [La fabrique du controle : une ethnomethodologie du choix des outils de gestion]

This paper sets out to contribute to the literature on the design and the implementation of management control systems. To this end, we question what is discussed when a management control system is to be chosen and on what decision-making eventually rests. This study rests upon an ethnomethodology of the Salvation Army’s French branch. Operating in the dual capacity of a researcher and a counsellor to management, between 2000 and 2007, we have unrestricted access to internal data revealing the backstage of management control: discussions and interactions surrounding the choosing of control devices. We contribute to understanding the arising of a need for control, the steps and process followed to decide upon a management control system, and controls in nonprofits. [Cet article vise à contribuer à la littérature sur la mise en place des systèmes de contrôle de gestion. À cette fin, nous questionnons ce qui est discuté lors du choix d’un système de contrôle et sur quoi repose in fine la décision. Cet article est fondé sur une approche ethnométhodologique de l’Armée du Salut en France permise par notre double qualité de chercheurs mais également de conseiller auprès de la direction de l’organisation entre 2000 et 2007. Un accès illimité à des données internes nous permet ainsi de mettre en lumière les aspects méconnus et invisibles du contrôle de gestion : les discussions et interactions entourant le choix d’outils. Nous contribuons à la compréhension de l’émergence du besoin de contrôle, des étapes et du processus de choix d’outils et enfin du contrôle de gestion dans une organisation à but non lucratif.]

Management accounting change in a subsidiary organisation

Parent–subsidiary relationships are commonplace nowadays, yet surprisingly there is a paucity of research analysing their dynamics over time. This paper presents a (longitudinal) case study, illuminating the dynamics implicated when a UK chemicals company imposed its systems and rules on a new subsidiary. Drawing on observations from a longitudinal case study (from 1993 to 2001), the study considers: (1) the extent to which a parent imposes its (management accounting) systems,rules and procedures on a subsidiary; (2) the role which (local) political, cultural and institutional factors in a subsidiary play in shaping the dynamics of such change implementation; (3) how new systems and practices become accepted and take root as values and beliefs and how they supplement earlier norms? The study provides insight for the questions above, and draws on institutional theories and a power mobilisation framework to assist in the interpretation of observations. We find that the operations of the subsidiary company are influenced by inter-related forces, both inside and outside the organisation encompassing issues of power, politics and culture. As such, existing institutions in a subsidiary organisation are influenced, sustained, and changed by the socio-economic context in which the subsidiary is located. Organisational practices designed to secure external legitimacy are not however always symbolic and decoupled from internal operations

Enablers of sense-making and responding and their impact on the effectiveness of management accounting practices

Management accounting practices are expected to adapt and evolve with changing information requirements. The purpose of this study is to determine the factors that enable management accounting adaptability and effectiveness. This study identifies three factors that drive management accounting adaptability through their support of sense-making and responding. Specifically, it is examined how top management team knowledge, team-based structures, and information system flexibility affect management accounting adaptability. The hypotheses are tested using data collected from an online survey of Australian and New Zealand companies. The results support the proposed relationships. Also a positive association between management accounting adaptability and management accounting effectiveness was found. This empirical study contributes to the literature on management accounting change by determining a number of drivers that improve upon the agility of organizational management accounting practices.

Firms’ information system characteristics and management accounting adaptability

This study explores the relationship between the qualities of an information system and management accounting adaptability (MAA) and effectiveness in firms. Design/methodology/approach I develop and empirically test a model where the qualities of the information system and management accounting effectiveness are mediated by MAA. Findings Information system flexibility (ISF) and shared knowledge had a significant and positive correlation with MAA, which in turn had a positive and significant correlation with management accounting effectiveness. There was also a moderation effect of ISF on the correlation betweeen information system integration and MAA. Research implications Information system integration may not lead to management accounting stability, but the lack of flexibility of a system and a lack of cooperation between the stakeholders might lead to its stagnation. Practical implications Organizations are advised to implement solutions that are relatively flexible and modular, as well as encourage cooperation between stakeholders to fully leverage and improve the existing and future systems. Originality/value The study extends the discourse on the interaction between management accounting and information systems by exploring the role of a number of factors that drive MAA.

Strategic Priorities, Company Performance and Attitudes Towards Management Accounting Techniques: an Empirical Study

The study investigates whether there is an association between different combinations of emphasis on generic strategies (product differentiation and cost efficiency) and perceived usefulness of management accounting techniques. Previous research has found that cost leadership is associated with traditional accounting techniques and product differentiation with a variety of modern management accounting approaches. The present study focuses on the possible existence of a strategy that mixes these generic strategies. The empirical results suggest that (a) there is no difference in the attitudes towards the usefulness of traditional management accounting techniques between companies that adhere either to a single strategy or a mixed strategy; (b) there is no difference in the attitudes towards modern and traditional techniques between companies that adhere to a single strategy, whether this is product differentiation or cost efficiency, and c) companies that favour a mixed strategy seem to have a more positive attitude towards modern techniques than companies adhering to a single strategy

Inventory Routing - A Strategic Management Accounting Perspective

This dissertation develops a strategic management accounting perspective of inventory routing. The thesis studies the drivers of cost efficiency gains by identifying the role of the underlying cost structure, demand, information sharing, forecasting accuracy, service levels, vehicle fleet, planning horizon and other strategic factors as well as the interaction effects among these factors with respect to performance outcomes. The task is to enhance the knowledge of the strategic situations that favor the implementation of inventory routing systems, understanding cause-and-effect relationships, linkages and gaining a holistic view of the value proposition of inventory routing. The thesis applies an exploratory case study design, which is based on normative quantitative empirical research using optimization, simulation and factor analysis. Data and results are drawn from a real world application to cash supply chains. The first research paper shows that performance gains require a common cost component and cannot be explained by simple linear or affine cost structures. Inventory management and distribution decisions become separable in the absence of a set-dependent cost structure, and neither economies of scope nor coordination problems are present in this case. The second research paper analyzes whether information sharing improves the overall forecasting accuracy. Analysis suggests that the potential for information sharing is limited to coordination of replenishments and that central information do not yield more accurate forecasts based on joint forecasting. The third research paper develops a novel formulation of the stochastic inventory routing model that accounts for minimal service levels and forecasting accuracy. The developed model allows studying the interaction of minimal service levels and forecasting accuracy with the underlying cost structure in inventory routing. Interestingly, results show that the factors minimal service level and forecasting accuracy are not statistically significant, and subsequently not relevant for the strategic decision problem to introduce inventory routing, or in other words, to effectively internalize inventory management and distribution decisions at the supplier. Consequently the main contribution of this thesis is the result that cost benefits of inventory routing are derived from the joint decision model that accounts for the underlying set-dependent cost structure rather than the level of information sharing. This result suggests that the value of information sharing of demand and inventory data is likely to be overstated in prior literature. In other words, cost benefits of inventory routing are primarily determined by the cost structure (i.e. level of fixed costs and transportation costs) rather than the level of information sharing, joint forecasting, forecasting accuracy or service levels.