MANAGEMENT ACCOUNTING SYSTEM

Management Accounting System

Declaration

Title of study: ________________________________________________________________

____________________________________________________________________________ This study is _____________ words in length (plus ____ pages of essential tables and figures), excluding title page, table of contents, summary, acknowledgements, preface, appendices and list of sources but including notes, and is thus equivalent to _____________ standard pages in length (225 words = 1 standard page).

The sources are mention in the last as references the material summarized or paraphrased from the work of other writers.

Signed ____________________________________ Date ___________________

Abstract

The paper is divided into three parts; each part has its own importance. In part one I have given the meaning of Global Organization, and then evaluated its different types, and approaches to business. In part two, the competing forces along with their relationship with centralization and decentralization are described. Finally, in the last part the role of Management Accounting systems and meeting their challenges through strategic integration are provided.

Contents

1 Introduction5

2. The evolution of different types of global organisations and approaches to business5

2.1 Global Organization5

2.2 Types of Global Organization5

Importing and Exporting5

Multi National Enterprises6

Global Organization6

2.3 Approaches to Business7

3. The apprehension between competing forces - centralization/ decentralization; standardization/ differentiation8

3.1 Competing Forces8

The rivalry between competing companies9

The potential development of substitute products11

Bargaining power of suppliers12

The bargaining power of consumers13

3.2 Centralization/Decentralization13

The advantages of centralization:14

Disadvantages of centralization:14

Characteristics of decentralization14

Advantages of decentralization:15

Disadvantages of decentralization15

3.3 Standardization and Differentiation16

4. The role of Management accounting systems in meeting the challenges of strategic integration18

5. A critical evaluation of the impact of globalization and the internal convergence of Management accounting processes26

6. Conclusions29

7. Recommendations29

References31

1 Introduction

Globalization is the process by which people become related to each other in every aspect of their life, culturally, economically and politically, technically and environmentally. The management accountant has to become a key pillar in the proper performance measurement in decision making by senior management and the development of strategies for the company for help, not only to survive but to build competitive advantage in a global business, growing increasingly hostile.

2. The evolution of different types of global organisations and approaches to business

2.1 Global Organization

Organization which cooperated with different units and dealing with number of countries to be called as the one organization through out the world.

2.2 Types of Global Organization

A growing number of organizations that traditionally operated in only one country have recognized the need to develop more global operations. As they broaden their operations worldwide, organizations may pass through three stages.

Importing and Exporting

The first phase is international interactions consists of importing and exporting. Generally, HR activities are not affected except for travel policies for those going abroad.

Multi National Enterprises

As firms develop and expand, they identify opportunities to begin operating in other countries. Because laws and regulations in those countries usually differ from those in the home country, the HR professionals in the parent organization must become knowledgeable about each country in which the MNE operators and must know how to adapt staffing, training, compensation, health and safety, and labour relations.

Global Organization

An MNE can he thought of as an international firm in that it operates in various countries, but ...