• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Critically evaluate the view of Lord that strategic management accounting is nothing more than 'The Emperor's new clothes'

Extracts from this document...

Introduction

CRITICALLY EVALUATE THE VIEW OF LORD THAT STRATEGIC MANAGEMENT ACCOUNTING IS NOTHING MORE THAT 'THE EMPEROR'S NEW CLOTHES' BY SIOW WEI LOONG (03063277) ASSIGNMENT SUBMITTED TO: MR. MALCOLM WELLSTEAD THE UNIVERSITY OF HERTFORDSHIRE 12 DECEMBER 2003 Introduction Simmonds (1981, 1982) coined the phrase strategic management accounting for the accounting information that would assist strategic decision-makers. Further with Keith Ward (1992) defined strategic management accounting as 'management accounting in the context of the business strategies being planned and implemented by an organisation'. However, the term 'strategic management accounting' has been in the management accounting literature for more than a decade, but there only seems to be a paucity of examples of strategic management accounting actually being used in reality. Thus, the existence of strategic management accounting was doubtful. We might curious of what is strategic management accounting? Is it a prerequisite for survival in a global economy (another job to pad out the diminishing role of the accountants), or only the emperor's new clothes? This paper will concentrate on the discussion of whether the strategic management accounting was applicable in reality. A discussion of comparison between the theoretical and empirical study will be given in order to support the argument. ...read more.

Middle

This is conflict with the view of Simmonds, 'management accountants are the ideal people to collect and analyse external data'. Rob Dixon (1998) argued that the management accountant is only one users of the information, and each user can user the management information system at his or her discretion. The strategic management accounting was changing since Simmonds first used the term. Going through the case of Cyclemakers again, the competitor information was collected by the sales representatives, which means that the operational level involved in the process of collecting competitor information. This kind of circumstances occurred might due to the reason of changing in environmental factor. The view of collection of competitor information in strategic management accounting evolved in order to fit the environment meet. Competitive Advantages Porter (1980, 1985) sees competitive strategy as concerned with 'creating and maintaining a competitive advantage in each and every area of businesses. Others highlighting the competitive context include Ohmae (1982) and Henderson (1989); comment that business strategy is all about competitive advantage. Without competitors there would be no need for strategy, for the sole purpose of strategic management is to enable the company to gain, as effectively as possible, a sustainable edge over its competitors. ...read more.

Conclusion

And the author against the view of Simmonds (1981, 1982) coined the phrase strategic management accounting for the accounting information that would assist strategic decision-makers. This is because the view of Simmonds about strategic management accounting was too strict, and Simmonds' view of strategic management accounting was conceptual application but not in reality. The author's view of strategic management accounting is just act as a guard line for the company to develop strategy, but it is not necessary to follow completely the concept of strategic management accounting during implementing. The company can develop its own strategic management accounting based on its need. This is supported by Rob Dixon that strategic management accounting as a concept is acceptable but has practical limitations. Therefore, the strategic management accounting should alter its concept in order to fit in current environment. Moreover, the author' view of strategic management accounting was supported by Dimnik and Kudar (1989), strategic management accounting with accounting numbers should be used to guide decisions. Last but not least, the author would recommend that the company can adopt the strategic management accounting to guide the decision. And the company can come out with good strategy by using strategic management accounting with the cooperation of marketing managers and management accountants. (Rickwood et al, 1990). ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Accounting & Finance essays

  1. Comsat case

    estimated the equity risk premium to be between two and four percent. Thus, he projected that Comsat's cost of equity was between six and eight percent with a midpoint of seven percent. Dr. Carleton used the following formula: Ke = Rf + Equity Risk premium 7% = 4% + 3% Cost of Debt The use of the U.S.

  2. This report has been produced as evidence for Unit 9 - 'Financial Services' - ...

    The need for TBI engineering is international banking that provides a current account, so that TBI is able to do business in foreign markets. I have look at the following providers Natwest bank, Lloyd TSB, HSBC bank and the bank of Scotland.

  1. Financial Analysis of Matalan PLC

    According to SSAP 15, Matalan had to provide, if it is likely that the liability (or asset ) will crystalise. Another form of discretion was shown by Matalan was to take advantage of the provisions of UITF 17 (Revised) to exclude the Inland Revenue approved sharesave scheme from this policy.

  2. International Accounting Standarts

    Thereby the rules of adequate and orderly accounting shall be hold. Prof. Dr. Holger Pooten from the University of Muenster concluded from that the three main functions. the HGB is build on: 1) Ascertainment of profits, distribution measurement, capacity accrual 2)

  1. Harmonisation of accounting standards in Europe

    Ireland 1986 Greece 1986 Spain 1989 Portugal 1989 Austria 1990 Italy 1991 Finland 1992 Sweden 1995 Norway 1998 The Companies Act implemented the Directive in the UK in 1981. The changes included compulsory formats and detailed valuation requirements. In other countries the introduction of the 'true and fair view' as

  2. "If management accountants are to remain useful to the organisations within they work, they ...

    Information systems have evolved to an extent where they meet the criteria required by management accountants. In the 1980's changes in the business environment led to a 'rethink' about the existing management accounting practices. In some cases measuring a company performance with the use of traditional methods can be limiting.

  1. The Purpose of Keeping Accurate Accounts

    The firm will make either a loss or a profit on sale, which is recorded in the profit and loss account. Over the full life of the asset the total depreciation charged will be the same regardless of method selected and amounts charged, because of the final adjustment.

  2. FINANCE ASSIGNMENT

    In countries that do require EPS disclosures, requirements differ widely. For instance, earnings for the numerator of the EPS calculation are defined in the United States as earnings available for common shareholders, and separate calculations are required for ordinary income and net income when differences exist.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work