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The role of strategic management accounting in the strategy formation
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Short Description: rule in managerial control is managerial autonomy. Management accounting systems which. enforce the organisational structure, define the borders of ...
Content Inside: The role of strategic management accounting in the strategy formation Esa Puolamäki Turku School of Economics and Business Administration, Pori unit Pohjoisranta 11, P.O.Box 170, FIN-28101 Pori, Finland tel. +358 2 627 2753, fax +358 2 627 2724 Email: esa.puolamaki@pori.tukkk.fi 22/05/2006 Abstract This paper is an answer to a call for longitudinal empirical studies of management accounting and it draws on the concepts of social theory to analyse the previously unexplored facets of strategic management accounting (SMA), especially, analysing the mechanisms of production and reproduction of those conditions which facilitate certain long term action. The central finding is that SMA has a remarkable role in the social constitution of a strategy. The paper introduces a theoretical framework for a social analysis of management accounting in the strategy process and emphasises managerial agency in the introduction of new SMA practices. Moreover, the cases suggest that the conceptual and organisational gap between strategic and operative management is diminishing both vertically in the organisational hierarchy and horizontally between different functions. Thus cross-disciplinary approaches may have positive effects on the conceptualisation of SMA and to the intensification of its usage. Key words: strategic management accounting, structuration theory, strategy process, strategic planning, strategic control 1 Introduction The objective of this paper is to add to our knowledge on strategic management accounting (SMA) in its organisational and actual strategy process context. The main concern of this paper is: Why after 20 years of growing interest among both researchers and practitioners the empirical evidence of SMA is more or less anecdotal and on the whole the concept is still vague? The central goals are to identify and evaluate SMA in its empirical context and to conceptualise the social roles of SMA in two divisional strategy processes. The research project embraced from the beginning a broad interpretation of SMA as the provision of financial and other information, meanings and assumptions to meet the requirements of the strategy maker in an enterprise's strategic development. SMA construct refers to a specific socio-technical solution to a perceived strategic business problem in a specific context. SMA practice is a combination of management accounting (MA) concepts, techniques and socially produced action which form a general means of supporting strategy process. The paper reports the findings of two longitudinal case studies of organisations
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