Management Accounting - bereaucracy Essay Example | Topics and Well Written Essays - 1000 words

Management Accounting - bereaucracy - Essay Example The same history acknowledges the fact that many businesses and organisation had been in bad postures in the early years of the 1970's. This, according to many business analysts, was mainly owing to improper performance analysis techniques which would reflect real business situation. Importantly, stakeholders, especially shareholders, were putting incessant pressure on management team to reach good end of year figures. If some theorists agree that this was mainly due to principle emphasis on external financial reporting and management accountant neglected the need for internal accounting and financial monitoring in management accounting basic functions; others argue that this effect was attributable to other contextual factors. Management accounting has always been seen as a vital activity which reflects the health of the business, and the efficient use of resources. This performance measuring technique is an important internally-based financial monitoring tool, which could guide corrective measures to be taken on many emerging departmental or process deviations. If many businesses have been part of the drastic changes involved in business process reengineering aiming at streamlining business processes at varied levels, the analysis and creation of management accounting data has also greatly evolved. The evolution of technology in the early years of the 1960's as well as changes in the mode of production have changed mindset to production-oriented management owing to the event of mass production. It has increasingly been recognised as from the second distinctive evolutionary stage of management accounting that, the need to appropriately use resources could influence the overall cost or production cost in many manufacturing companies, especially where machineries are concerned and that their fixed costs could influence greatly margins at year end. In this context, there have been drastic changes to scrutinise costs associated to each activity or process which is referred to as Activity-Based Costing. The main aim was to decrease the overall seemingly inaccurate overhead allocation based on standard American costing, especially cost of running machineries in period where large scale production and customisation was becoming popular as strategy. Management accounting at this particular stage inherently focus on data to facilitate control which was a vitally important function in conventional management approach. Line management laying emphasis on production had as main objective s to satisfy orders and the critical data required was to better control and monitor processes both in machineries and labour. The focus was to establish strategy mixes that support organisational objectives, and develop and maintain the organisational capabilities necessary for strategy realisation. Furthermore, enormous consideration on