Management Accounting : Planning And Performance Management Systems

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Management accounting is described as “a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organisations strategy” (Blocher, et al., 2009). Many Changes in the business environment have occurred in recent years which have caused substantial adjustments in cost management practices leading to a contemporary business environment. These changes in the business environment have caused management accountants to respond by implementing and innovating specific management techniques to better implement strategy in these dynamic times. Also in looking at…show more content…
This was imperative as only valuable information could encourage managers to make more accurate decisions. Management accounting techniques such as marginal costing and responsibility accounting were presented in this time to assist managers with decision making or create strategic business units. A significant increase in global competition complemented by rapid technological growth in the 1980s affected many aspects of the industrial sector. In this time, the management emphasis continued on cost reduction, however more process analysis was made conceivable by cost management technologies. Some techniques widely adopted by businesses in this time include Just in Time (JIT) and Activity-Based Costing (ABC). In the 1990s world-wide industry continued to face considerable uncertainty and unprecedented advances in manufacturing technologies, which further increased and emphasised the challenge of global competition (Abdel-Kader & Luther, 2008). Prevalent techniques introduced during this stage were Total Quality Management (TQM), Activity-Based Management (ABM), Benchmarking and Reengineering. In reviewing the changes in management accounting techniques we must first look at what caused these changes. (Blocher, et al., 2009) outlines six major changes in the business environment over recent years. These include; an increase in global competition; lean manufacturing; advances in information
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