• 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. 'Historic cost accounting is the worst possible accounting convention, until one considers the alternatives.'

    the past and decision making for the future, the products of current value accounting of the Edwards and Bell variety are irrelevant and misleading. He and some others prescribed an alternative accounting model under current cost accounting - exit price accounting.

  2. Social and Enviromental Accounting

    Applying a cost-benefit analysis is seen to be an important part of the standard-setting process. 'The benefits from improvements in financial information flow through primarily to the users of the information (in terms of better decisions), though there may also be social benefits from improvements in the allocation of resources and in spurring managers to improve performance.

  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. Give an explanation of break-even analysis and explain how it supports the achievement of ...

    When using break-even, a business may draw several charts using different prices to assess the impact of price changes. This approach is useful in markets where prices may be volatile.

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

    The Bank of Scotland provides the accounts in every major currency, including the euro. As with any current account, they offer cheque books for payments in the UK. You receive regular statements and can access your account using our PC Banking service.

  2. The Purpose of Keeping Accurate Accounts

    Disadvantages using the computerised accounting system. 1. Computer fraud: the use of computers by programmers to assist in defrauding business entities of huge amounts of money. 2. Power failures: the other forms of system breakdowns or crashes. Such system therefore require an elaborate program of constantly backing - up computer records.

  1. Financial Analysis of Matalan PLC

    or revalued amount of the economic benefits of the tangible fixed asset that have been consumed during the period. Tangible fixed assets (e.g. freehold buildings; fixtures, fittings and equipment; motor and commercial vehicles) are stated at their purchase price, together with any incidental expenses of acquisition.

  2. International Accounting Standarts

    Therefore the systems served for different reasons and the form and content differ. 2.1 The HGB Accounting Standard The HGB is the oldest of the three common accounting standards (HGB, IAS and US-GAAP).It was established in the year of 1900 and not changed much since that time (about 100 years).

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