Session 9: Implementing management accounting in organizations Flashcards
So last week what did we look at?
Looked some SMA techniques which add value to supply chain and value chain Supply chain = Industry roadmaps, supplier scorecards and open-book accounting.
Value chain = CPP, target costing and cost of quality.
So with the SMA techniques i have talked about what does any implementation of these SMA techniques do?
it interferes not only with pre-existing costing systems but also with organisational strategies, rountines, values and cultures. This disruptive. So planning the implementation is vital.
What management should consider when implementing the new system ( e.g. ABC)?
System design
Implementation procedure
Technical problems
Social and organisational context.
What pre-implementation considerations do we need to consider to do ( PLANNING BIT) ? ( SYSTEM DESIGN)
1) Assign responsibilities
2) Capture economic reality of the firm - Graphical mapping
3) Design an activity based costing system- scope the system, do we want to do for the entire organisation or departmental organisation, agree on the level of detail.
What pre-implementation considerations do we need to consider to do ( Designing bit BIT) ?
4) Planning the implementation process - in order to avoid any unforseen complications ( big obstacles)
5) Monitoring and evaluation - to make necessary adjustments
6) Implementing ABC - variety of approaches avaliable.
Whats this trying to show?
Organisations that provide services rather than physical products, can map out many different possibilites in the value creation process.
The way in which process becomes visualized directly effects the cost priorities that employees assign to their respective tasks and might trigger unintended consequences. ( e.g. option one you might discontinue one option because it might appear expensive, or option 2 you might discontinue particular activities that appear expensive.)
What are important implementation process decisions?
1) Short vs long time horizon ( do we need a short or long implementation of e.g. ABC
2) Tight planning vs flexibility ( either follow a strictly defined roadmap or leave some flexibility
3) Bottom up versus top down
4) Core management team vs multiplicity teams ( either need one implementation team or whether complexity requires a mulitude of teams.
5) Low vs high external involvement ( extend to which external experts such as consultants or academics are involved)
What does Parralel vs stand alone mean and what does replace vs align culture mean ( all part of implementation process)?
Parralel vs stand alone = decide whether old costing systems remain online throughout the rollout or if those are being dimissed)
Replace vs align culture ( whether it should be aligned with current organisation culture of it should be replaced.
Fill this in. ( So you could be given an essay and we need to think about this)
What a common technical problems with implementating e.g ABC?
1) Cost of implementing ABC ( cost vary with level of detail, size of organisation, involvement of software)
2) Cause and effect links ( not scientific, we don’t know really if ABC is true cost)
3) Alignment with strategy - all the techniques have a common goal of reducing costs, but what about adding value, reducing cost can get lost with value. ( Johnson(1992)
What are common organizational resistances to implementation of SMA technqiues? ?
1) Improper communication - not being told why there is an implementation of a new sma technique, people assume, its to make their jobs redundant.
2) lack of skills/training - reisistance is likely when learning new difficult skills
3) Feeling of exclusion - no input in deciding on implementation.
So clearly it seems that organizational resistance can be emotional, so what are ways to to reduce peoples resisitance to change?
entacting dialogue with employees, face to face, give them some power, but all of this is costly.
