Critical Project Report



Critical Project Report

Introduction

In the wake of globalization, many companies are seeking over sea opportunities for growth which has resulted in common place relationships of Parent -subsidiary. The paper titled 'Management Accounting Change in a Subsidiary Organization' highlights the importance of dynamics in the parent -subsidiary relationship. In the paper, Yazdifar drew attention to the complexities at the subsidiary level which he feels is typically ignored while excessive importance has been given to parent company. In today's competitive environment in which business activities takes place, all the companies whether its parent or subsidiary is working to develop steady improvements on all fronts. A subsidiary company has particularly obligation towards parent to adopt management accounting system which may or may not successes in the end. Whenever a company acquires a subsidiary, it imposes its own rules and systems on the subsidiary. Yazdifar has taken a critical review on the topic on which he believed not enough research has been done especially from the point of view of management accounting systems. In the paper, he analyzed a longitudinal case study in which he analyzed a real life condition in which a company 'Group' acquired a subsidiary 'Omega'.

When it comes to parent subsidiary relationship, there have been consortiums of factors which can be a topic of discussion. In this essay, we will critically analyze the parent subsidiary relationship particularly from the point of view of management accounting and what is the function of management accounting in the process of filling the gap between parent and subsidiaries.

Works Contribution

Yazdifar has made a significant contribution in the field of parent subsidiary relationship from the point of view of management accounting. He disclosed one of the crucial aspects of parent subsidiary relationship which has been ignored in past. His research will be a foundation which will pave way for subsequent research in the same field with better research methods, which can further clear the relationship and complexities involved at both ends.

Location within Existing Literature

The research paper has elaborated an important issue in the field of management accounting relating to parent subsidiary relationship. Yazdifar is rightly suggested that whatever research has been done in this context, it has completely focused on the complexities faced by the management of the parent company while completely ignoring the other side of the picture. The world of business in recent decades has gone through a process of transformation as a direct result of recent phenomenon which has compelled organizations to join up resources in order to ensure their survival. Even though, the mergers and acquisitions have been going on for many decades now, still not much research has been done to understand the dynamics faced by the parent and subsidiary. A quick glance over the history of mergers can show us that not many acquisitions and mergers have successfully completed. There has always a need to study the reasons behind this fact. There was also need of a research which introduces the relevant individuals engaged in the process ...