THE USE OF MANAGEMENT ACCOUNTING TECHNIQUES AS A VERITABLE TOOLS FOR ORGANISATIONAL DECISION MAKING
CHAPTER ONE
INTRODUCTION
1.0
BACKGROUND TO THE STUDY
Prices
of goods and services are gradually increasing day by day, and due to the fact
that the sole aim of a businessman, producer or manufacturer is to make profit
they end up making use of low quality materials for production so as to reduce
cost of production and maximize profit. Moreover, with the increase of
competitors around, most of the producers have thought it wise to manufacture
or package a quality product and also enhance their profit level, prevent
wastage and utilize available resources, management decision decision needs to
be made both mostly in the financial aspect.
The
precarious situation of the economy requires to major participants in economic
life, policy makers in particular, to take immediate action. However, these
measures delays to occur. On the economic level, the decision is at the
discretion of the manager. Therefore, a manager cannot achieve its intended
objectives, without taking into account information obtained from management
accounting techniques. For efficient management of the economic entities having
as its object of activity the production of goods, information is needed to
calculate product costs. Cost accounting techniques are being applied to
collect information on production, to allocate specific spending lots of product
and unit cost calculation. Also, as the deployment of production and generation
of costs, strict quality control procedures are being applied to compare actual
costs with planned costs. Through these methods it can be determined the
efficiency of exploitation activity and management. Finally, managers need
special financial reports and analysis to substantiate their decisions.
Therefore, at the base of management decisions must stand the analysis of
alternative lines of action.
Management
accounting techniques has been equipping organizational managers with important
information to take decision and deals with both constant timely and frequently
changing business dealings i.e. order received, order backlog, capacity
utilization, and sales. Other analytical reports are prepared for decline in
profitability, market share shrinkage, customer loyalty disruption towards the
organization. In both cases, it is usually done through comparing actual
results with the planned results or benchmarks. Management accounting
techniques is about “the process of identifying, measuring and communicating
economic information to permit informed judgments and decisions by users of the
information” (D. Colin, 2000). Management accounting techniques usually plays
as an influencing role for planning, organizing, leading and controlling
through managers of the organization. Planning activity is done mostly through
budgeting, standard costing, target costing, cost-volume-profit analysis and
directing or organizing through process reengineering, just in time (JIT),
activity based costing (ABC), flow direction, value proposition. Leading and
controlling through total quality management (TQM), balance score card (BSC),
actual and budgeted performance comparison, benchmark analysis.
Management
accounting techniques is renowned to be very useful accounting resources that
extensively help organizations incorporate cost accounting data, financial and
non-financial information. Knowing this
information is essential for managers to do their jobs, in the present day
today, organizations need development and continual improvement in their
performance for maintaining their activity and survival in the dynamic
competitive environments. The abilities and capacities of an organization
through efficient and effective use of the organization’s resources are
introduced as the important tools for improvement of organizational performance
that benefiting from it requires aware management. Therefore, collecting and
providing relevant information to the performance is indispensible for
organizations that the need can be satisfied with employing management
accounting techniques.
Furthermore,
management for achieving the organization’s objectives requires firm plans that
management accounting can employ different solutions in the plans through
appropriate operating methods as well as help managers in achieving the
objectives. The recent progress of researchers in the field of competitive
markets indicates that organizations needs management accounting in order to
improve their performance according to the changing competitive conditions.
The
conducted research indicates that management accounting techniques can be used
in the following ways:
·
Serves as a catalyst
for decision making process
·
Use as a financial
tools for management decision making
·
provide the managers’
needed information
·
to improve the
organization’s performance
·
Sustain company
growth and profitability.
A Research proposal for the use of management accounting techniques as a veritable tools for organisational decision making:
Reviews: A Review on the use of management accounting techniques as a veritable tools for organisational decision making, management, accounting, techniques project topics, researchcub.info, project topic, list of project topics, research project topics, journals, books, Academic writer.
Prices of goods and services are gradually increasing day by day, and due to the fact that the sole aim of a businessman, producer or manufacturer is to make profit they end up making use of low quality materials for production so as to reduce cost of production and maximize profit. Moreover, with the increase of competitors around, most of the producers have thought it wise to manufacture or package a quality product and also enhance their profit level, prevent wastage and utilize available resources, management decision decision needs to be made both mostly in the financial aspect... accounting project topics
THE USE OF MANAGEMENT ACCOUNTING TECHNIQUES AS A VERITABLE TOOLS FOR ORGANISATIONAL DECISION MAKING