The Choice Of Management Accounting Techniques Accounting Essay

In the new competitory concern environment presents, the direction accounting techniques used by the companies plays a critical function in helping them to stay profitable and at the same clip to derive the competitory advantage. The assortment of picks among direction accounting techniques can be the great chance for the companies to take the best techniques that fit consequently to the company ‘s capacity and their aim. Given by the evolving of the direction accounting patterns around the universe, there are major switching in the used of techniques and construct to function the direction needs from utilizations of traditional attacks towards the modern-day attacks. The traditional attacks which besides known as traditional direction accounting techniques including budgeting tools, cost soaking up technique, cost-volume-profit analysis and many other traditional techniques has been used from the past 100 old ages ago. Nowadays, the direction of the companies started to look into modern-day attacks given by the strategic direction accounting techniques for case Activity-based costing ( ABC ) , Entire Quality Management ( TQM ) , The Balance Scorecard ( BSC ) , Target Costing, Just-in-Time ( JIT ) , and many others in order to increase the companies value towards offering better merchandises and functioning high quality services to the clients.

The pick of direction accounting techniques is fundamentally depends on the direction determination. However, it can be driven by many factors including the company objectives and schemes, resources and capacity, concern environment and fight, organisational construction and besides the factors of cultural influences. Seems the picks are depending on many direct and indirect factors to the direction determinations, the cultural influences have shown a somewhat different position in it linkages towards the direction determination. This is due to the fact that cultural factors are invisibles and difficult to explains through the direct observations. Indeed, there might be a general effects in its influences on the direction determinations, nevertheless, there are need to foster clear up whether the consequence of civilization on the pick of direction accounting techniques are existent and can be seen visibly or otherwise. Therefore, this paper tries to supply basic accounts and critically measure on the consequence of civilization towards the direction picks among the available direction accounting techniques.

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CULTURE INFLUENCES AND MANAGEMENT ACCOUNTING PRACTICES

Cultural influence proved by many surveies has played important functions in the development of accounting system around the universe. Study done by Gray ( 1988 ) has initiated the development of theory of cultural influence in determining the accounting system across states. Followed by Gray ‘s survey, many other surveies has come to the images in order to incorporate the cultural factor towards the accounting in different point of positions including Eddie ( 1990 ) , Gray and Vint ( 1995 ) , Salter and Niswander ( 1995 ) , Chancani and Willet ( 2004 ) which all this surveies are done in proving the theory of civilization influence in accounting patterns. In the direction accounting position, Harrison and MacKinnon ( 1999 ) did a cross-cultural survey in proving the civilization impact on the direction control system design. Basically, the theory of cultural influence has dominantly contributed through Hofstede ‘s survey which involves the development of cross-cultural values dimension. Hofstede ‘s cross-cultural values dimension so has been used widely in many other surveies as a cardinal model in proving the cultural influence factors in accounting.

The term of ‘culture ‘ as defined by Hofstede ( 1980 ) as “ the corporate scheduling of the head which distinguishes the members of one human group from another ” can be farther divided into two degrees as discuss by Gray ( 1988 ) . The commonly word of ‘culture ‘ is normally referred to civilization at the social system at big given by the state origin that carried different inclination, belief system, attitude and penchant. For illustration people from Japan state have the set of head and penchant towards something which are different from those in America state. Therefore, Hofstede survey farther classified the set of civilization different based on the state beginning in the specific civilization country such as Anglo, Nordic, More developed Asian, Less develop Asian, etc. On the other manus, there is another term as sub-culture ( Gray, 1988 ) or concern unit civilization ( Baird et al. , 2004 ) which represents the civilization within the organisation. However, the treatment on the consequence of civilization on the pick of direction accounting techniques will be refer to the civilization at the national degree or society system at big represent by the state beginning.

IS THERE ANY EFFECT OF CULTURE ON THE CHOICE OF MANAGEMENT ACCOUNTING TECHNIQUES?

There are many surveies try to associate the direction accounting techniques used in different states given by the different penchant and inclination in one ‘s state. For illustration, analyze done by Sulaiman et Al ( 2004 ) investigates the direction accounting patterns in the selected Asiatic states and found that India state is still utilizing the traditional direction accounting techniques and loath to follow the modern-day techniques because among Indian directors, they have the attitude and inclination of hazard turning away, more conservative and therefore hold really small invention. Therefore, they are likely prefer to keep on what presently they patterns and seek to avoid the acceptance of new direction accounting techniques. The inclination of holding the hazard turning away and conservative penchant besides derive from the Hofstede ‘s civilization dimension to stand for the attitude of the direction towards hazard in acceptance the new direction accounting techniques which belief to be unsure and could be do a failure to the company. As harmonizing to the Hofstede civilization dimension, Asiatic states are probably more risk turning away and conservative and therefore determine their direction attitudes ( Hofstede, 1980 ) . Therefore, in support to the studied done by Sulaiman et Al ( 2004 ) , India as one of the Asiatic states may hold the inclination to remain on the traditional direction accounting tools in order to avoid the hazard.

As conformity to Wijewardena and Zoysa ( 1999 ) in their survey of direction accounting patterns in Australia and Japan, Japanese which have the penchant on corporate determination doing manner stress on cost planning and cost decrease tools. Therefore, Nipponese direction probably to follow the direction accounting techniques that more towards strategies the construction to cut down the cost at the beginning of the procedure such as usage of mark costing technique. On the other manus, Australian which have more individuality oriented in the determination devising manner stress on cost control techniques. Therefore, Australian companies probably to utilize direction accounting technique that will supply ongoing control including budgeting and discrepancy analysis. In add-on, the consequence from the Wijewardena and Zoysa ( 1999 ) survey besides shows that the more corporate oriented in Nipponese civilization has contribute on the extremely usage of Just-in-Time ( JIT ) stock list direction system which JIT technique requires more incorporate and high cooperation between the maker and the providers. Therefore, JIT is suited to implement by the Nipponese companies which they shared the common values of being corporate. On the other manus, JIT techniques are really limited to utilize in Australian companies given by the individualistic values carried by the Australian people in the workplace.

In add-on, MacArthur ( 2006 ) did a survey to analyze the cultural influences on German and U.S direction accounting patterns and he found such important differences in the direction patterns for both states. Given by the flexibleness to alter in U.S civilization has giving impact on the extremely acceptance of Activity-based Costing ( ABC ) while in Germany, their civilization in workplace are non flexible in the acceptance the new method. Other than that, research done by Zadry and Yusof ( 2006 ) besides found that the barriers in the execution of Entire Quality Management ( TQM ) technique in Malayan automotive companies is due to the cultural factors embedded in the organisation where the people in the Malayan organisation are likely opposition to alter. Up to that extent, it can be concluded that Malayan society are normally comfy with the everyday and therefore hard to accept the acceptance of new method in the direction patterns.

Therefore, there are effects of civilization influences on the usage of different direction accounting techniques as proved by assorted surveies. Particularly in the contradict form of civilization countries as portrayed in Hofstede ‘s civilization surveies, the inclination to follow certain direction accounting tools can be seen comparatively from the comparing of U.S and Nipponese civilization ( Chow, et Al, 1994 ) . However, major surveies that investigate the impact of cultural differences and the direction accounting patterns are based on individual comparing. Therefore, it can be argued that the consequence can non be generalized and farther surveies are needed to back up those surveies from different states and likely proving the different direction accounting techniques specifically.

Impact OF GLOBALISATION AND INTERNATIONAL HUMAN RESOURCE MANAGEMENT

Though many surveies has proved that national cultural factors played important function in the pick of direction accounting tools, the fact that can non be denied is that civilization is a dynamic in nature and outgrowth throughout the times. Particularly in the impact of globalisation, the cultural differences between states are likely being reduces due to the consequence of mobilisation of human resources across states and constitution of many transnational companies. The outgrowth of cultural across states has become critical in current concern environment which involves many exiles working in different states for the intent of cognition and accomplishments sharing.

Shields ( 1998 ) found that the outgrowth of European states as consequence from the consequence of the globalisation has brought the convergence of direction accounting techniques across states. However, the writer believe that the convergence is peculiarly in the usage of direction accounting techniques but the intents of manner in utilizing such techniques still in different manners between the European states. In add-on, the growing of transnational companies across states has brings an impact of the outgrowth cultural between the host and the origin state. The free flow of engineerings and human resource between states has reduces the cultural spread and hence cut down it consequences on the peculiar inclination on the pick of direction accounting tools that applied to the transnational company.

However, based on the simple observation, though the transnational companies are likely to emerge with the local civilization, but their inclination to convey their ain civilization in pull offing the company still gives an consequence. For illustration, many among the transnational companies in Malaysia applied the strategic direction accounting tools such as Target Costing, Kaizen Costing which originally invented by the Nipponese people because of influence from spirit to look into Nipponese civilization which has shown a successful consequence. Therefore, evidently the consequence of civilization still took topographic point in the pick of direction accounting techniques but the national cultural besides could emergence with other civilization through the consequence of globalisations.

Decision

In decision, the civilization consequence has shown significantly influence towards the pick of direction accounting techniques. The direction determinations towards the direction manner and patterns proved by many surveies have given influence from the national belief system and cultural inclination. Therefore, direction from different state beginning has different penchant and therefore tends to follow the direction accounting tools that fit to their organisation environment. However, the impact from globalisation concern environment has open up the outgrowth of direction accounting patterns across states to portion the common penchants and therefore reduces the cultural spread. Nevertheless, the consequence of cultural differences still taken into topographic point in the direction accounting patterns given by the cultural factor involve with the social belief system which hard to alter and wholly removes even in the long period of times.

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